Bitcoin Miners to See Increase in Profit Thanks to Lower Competition

Bitcoin miners are expected to see an increase in profit because many may have to shut down or cool off their operations due to the extreme heat that usually occurs in North America during the summer.

Bitcoin miners in North America are bracing for a potential windfall as the summer heatwaves are expected to drive up their profits.

According to industry data, the extreme weather conditions could lead to an increase in the revenue generated by these miners. Bitcoin’s hash rate is also anticipated to be impacted by this weather phenomenon.

A large portion of Bitcoin mining is concentrated in the United States, with recent figures indicating that US miners contribute about 37% to the global hash rate. This presence is expected to amplify the effects of the heatwaves on the overall Bitcoin mining landscape.

As many miners may be forced to shut down or reduce their operations due to the heat, the overall competition in the Bitcoin mining sector is likely to decrease. This could lead to higher profits for those miners who are able to continue operating throughout the summer.

However, Bitcoin miners have been facing a profit squeeze in recent months, largely due to the halving event, which reduced their mining rewards by half. Bloomberg reported that these miners could lose up to $10 billion in revenue following the halving event.

Despite this, the departure of some miners during the summer heatwave could provide an opportunity for others to recoup some of the projected losses.

Furthermore, the entry and exit of miners into the Bitcoin mining network is a continuous process, influenced by various factors such as profitability, energy costs, and technological advancements.

As the network adjusts to these changing dynamics, the overall hash rate, which represents the combined computing power of the network, tends to experience periods of growth and stagnation.

In the past two years, Blockware noted that during the North American summer months, the Bitcoin hash rate has either stagnated or declined.

This is attributed to the curtailment of mining operations by some miners in response to the heat, which affects the ASICs used for mining. These devices can reach very high temperatures without proper cooling measures.

According to Blockware analysts, heat mitigation is the “number one” operational challenge faced by Bitcoin miners.

They highlighted that residential energy consumption also reaches high levels during the summer months, activating demand response clauses in miners' power purchase agreements.

This leads to curtailments, especially for miners on variable energy tariffs, and ultimately affects the Bitcoin hash rate.

As a result, the Blockware analysts anticipate another “summer of flat hash rate/difficulty growth” due to these heat-induced curtailments and the ongoing miner capitulation.

This is occurring amidst the halving-induced “crunched profit margins,” which Blockware noted have been driving smaller miners to the brink of capitulation.

The network hash rate has indeed been declining for a while now, currently sitting at 624.63 EH/s.

BTC price is currently hovering around $65,400, showing a slight decrease in the last 24 hours.

News source：https://www.kdj.com/cryptocurrencies-news/articles/bitcoin-miners-increase-profit-lower-competition.html

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