Miners Take a Breather Report Bitcoin Hashrate and Mining Difficulty Expected to Decrease in Summer Competition to Ease
Coindesk reported that due to the arrival of the North American summer heatwave and the initial weakening of competition among miners after the halving, the Bitcoin network’s computing power has seen a significant decline in recent weeks. Luxor Technologies, a data analysis platform, pointed out that mining difficulty and competition may also gradually slow down, providing support for the Bitcoin market price.
Summer Bitcoin Network Computing Power Decline
Mining Difficulty May Be Reduced
Major Miners Actively Merge and Acquire
Mining Enterprise and Political Entanglement
With the Bitcoin halving event fermenting, the profitability of major miners has also seen a significant decline in the overcrowded industry over the past two months.
At the same time, even though some miners have upgraded their mining machines on a large scale to resist the continuously increasing competitive pressure, temporarily increasing the computing power of the Bitcoin network, data from Hashrate Index shows that the Bitcoin network’s computing power has been continuously declining since reaching a historic high in May, dropping by about 10% to 589 EH/s.
Bitcoin Network Daily Average Miner Income (7-day Moving Average)
In addition, Blockware Intelligence analysts stated that in addition to this, Bitcoin computing power usually remains stable or declines during the North American summer: ASICs are large, powerful mining machines that can reach very high temperatures if not properly cooled. “Heat dissipation is the primary challenge facing Bitcoin miners at present,” they added.
Colin Harpe, an analyst at Luxor, also expressed agreement, stating, “As we enter the summer in the United States, we expect to see whether the heat wave will force miners to cut back on operations, thereby suppressing computing power growth, as we saw in 2022 and 2023.”
As a result, miners must face a choice: to consume more electricity costs to create cooling measures, or to reduce business scale to lower operating costs. Harpe anticipates that U.S. miners may reduce their operations due to increased energy costs: If computing power continues to decline, miners may welcome a reduction in mining difficulty this week, and lower computing power and difficulty may be beneficial to some miners. The above data may also lead to a slowdown in mining industry competition.
Faced with the declining profitability of miners after the Bitcoin halving and the current bleak situation in the crypto market, major miners are also committed to further mergers and integration efforts. Among them, mining company CleanSpark’s latest announcement stated that it will acquire five Bitcoin mining facilities in Georgia for $25.8 million, potentially increasing the company’s total computing power to over 20 EH/s by the end of June.
Riot Platforms and Bitfarms’ hostile takeover case is also continuing to simmer. Last week, Trump met with large mining companies such as Riot Platforms and CleanSpark, promising to protect Bitcoin mining and calling for all remaining unmined bitcoins to be mined by American companies. In fundraising events and his 78th birthday celebration earlier this month, Trump also emphasized multiple times that he would be the “cryptocurrency president” and end Biden’s war on cryptocurrencies.
