The latest “State of the Network” report by Coin Metrics and analyst Matías Andrade reveals that the 2024 bitcoin halving event has brought significant changes to the mining scene.
The halving, which took place in April 2024 and reduced block rewards from 6.25 BTC to 3.125 BTC, had a severe impact on miner earnings. The report shows a sharp decrease in BTC-denominated revenue per terahash per second (TH/s) of mining power immediately after the event.
However, the price of bitcoin experienced a thrilling surge to over $105,000, which partially offset the negative impact and boosted USD-denominated revenue per TH/s. Despite this, profitability still falls short of the levels seen before the halving, indicating challenging times for miners striving to maintain their profit margins.
According to Coin Metrics’ analysis, publicly traded bitcoin mining companies have outperformed the growth of bitcoin’s price with significant fluctuations. While bitcoin’s value increased by 54.3% since July, the stocks of leading mining firms skyrocketed. Hut8, Bitdeer, and Core Scientific emerged as the top performers, recording gains of 68%, 78.5%, and 60.2%, respectively.
Researcher Matías Andrade emphasizes that operational expertise, strong financials, and cutting-edge mining rigs have played a crucial role in distinguishing successful companies from the rest. Firms that held onto bitcoin during the bear market also benefited financially as BTC prices rebounded. The mining hardware industry has been advancing rapidly.
Coin Metrics’ “MINE-MATCH” data indicates a significant shift towards S19-series ASICs, such as the XP and JPro models, which now dominate the network’s hash power. This demonstrates a clear move away from older models like the Antminer S9, which were largely retired by 2020. Andrade emphasizes the importance for miners to keep their equipment up-to-date to remain competitive in this ever-evolving mining landscape. Looking ahead, Coin Metrics’ report underscores the need for miners to adapt to bitcoin’s diminishing supply, fine-tune their operations, and tap into inexpensive energy sources.
Andrade points out that maintaining innovation and efficiency is crucial for long-term survival as competition intensifies. The conclusion of Coin Metrics’ Q4 2024 mining report depicts a bitcoin mining industry grappling with revenue declines caused by the halving, while simultaneously dealing with hardware upgrades and a volatile market. With bitcoin’s price making a comeback, the focus is on operational resilience and technological expertise to secure profits.
