07 May

Hut 8, one of the United States' leading crypto mining firms, announced a significant decrease in its proprietary production for April, as per a company statement released on May 6.

The firm noted a 36% decline in the amount of BTC mined in April compared to March. This drop was largely attributed to the relocation of more than 25,000 mining machines from facilities in Nebraska and Texas, which were acquired by Marathon Digital Holdings.

In April, Hut 8 generated 148 BTC, down from 231 BTC in March, as its deployed hash rate decreased from 5.4 EH/s to 4.5 EH/s.

Asher Genoot, CEO of Hut 8, highlighted the operational efficiency of the team amid the halving event. He emphasized their ability to maximize the deployed hash rate during the relocation of their fleet from hosted to owned facilities, while also expanding their capacity.

Mining Productivity Drops

Other prominent Bitcoin mining companies, including Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf, also disclosed reductions in production for April, according to insights from industry publication The Miner Mag.

The halving event on April 20th halved the block reward to 3.125 BTC, consequently reducing mining output to approximately 450 BTC per day from the previous 900.

Despite this, the impact of the halving was briefly offset by the BTC fee market when Bitcoin Runes were introduced, driving up demand for block space. However, with the waning popularity of the latest meme asset craze, it is anticipated that BTC production rates may continue to dwindle, potentially leading to increased selling pressure from miners.

Riot Blockchain, in its April production update on May 6th, revealed a 12% decrease in BTC production compared to March, with 375 BTC generated in April versus 425 in the previous month.

Nevertheless, Riot remains optimistic about its future mining capabilities, projecting its total self-mining hash rate capacity to surpass 31 EH/s by the end of 2024, more than doubling its existing capacity. 

Slump in Profitability

The decline in production from these mining companies has corresponded with a decrease in profitability, often referred to as the 'hash price.' Currently, the hash price stands at only $0.05 per terahash per second per day, as reported by Hash Rate Index.

This figure represents a significant decrease, plummeting by 72% from a peak observed around the time of the halving, when it reached $0.182 per terahash per second per day. Moreover, it has experienced a staggering 87.5% decline from its highs in 2021, which hovered around $0.400 per terahash per second per day.

May 2024, Cryptoniteuae

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