Blackrock Saves the Day, Miners Build Away!
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Blackrock Saves the Day, Miners Build Away!
Tight margins do not stop Hashrate but the summer might
Bitcoin tested the $25K level but sentiment improved after Blackrock filled for a Bitcoin ETF. Network hashrate again rose to new all-time highs and difficulty followed suit. Hashprice continued to slide and the premium on next-gen miners diminished even further. June is not the most exiting month looking at mining economics. However, there are exiting things going on in the industry! Find out in this week’s newsletter, I dove into the following topics:
Bitcoin Price
Network Hashrate
Difficulty Adjustment
Hashprice
ASIC Prices
Fun Fact
News Highlights & Must Listen Podcasts
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Bitcoin Price
With the bearish price action of the last three months, it was no surprise that BTC pushed down further to test the $25.000 area. Bitcoin found support at the $25K level which is a good sign. BTC fell sharply last week as the lawsuits faced by Binance and Coinbase weighed heavily on investor sentiment. Blackrock filing for a Bitcoin ETF turned this sentiment around. BTC still needs to pass the 50 SMA (green line) and 100 SMA (orange line) to get back on a bullish track.
Network Hashrate
Yet again hashrate hit a new high. After almost reaching 400 EH/s, the 7 DMA took a turn after reaching 395 EH/s on the 11th of June. Hashrate dropped back to 370 EH/s, probably because of a heatwave in Texas. Despite this 6,75% drop, it should be no surprise if the network passes the 400EH/s in the coming days or weeks.
One of the reasons that hashrate keeps on climbing is the fact that older gear is being replaces by newer ASICs with higher hashrate and efficiency. The other significant portion of the increase in hashrate in the first half of 2023, can be attributed to the capital investments made by large miners in late 2021 and the first half of 2022.
During the latter half of 2022 and the early months of 2023, there hasn't been much capital entering the mining ecosystem. As a result, the growth of the hash rate in the second part of this year will depend on new capital inflows and the ability of miners to quickly deploy new equipment. The prices of ASICs are still low, prompting many companies to seize this opportunity and expand their operations with newer generation equipment.
If BTC price will stay in the $30K - $25K range for the rest of the year, I do not expect the same growth rate of hashrate in the second part of 2023. Mining economics need to improve for many in order to be able to survive the halving next year.
It will also be interesting to see if the summer weather in the Northern hemisphere will lead to the high amount of curtailments like last year. The first heatwave in Texas was a fact. This seemed to have an impact on hashrate but we’ll know for sure when companies report on the month of June.
Difficulty Adjustment
Last week there was another +2.18% difficulty adjustment. The 10th upward adjustment this year. The current difficulty Epoch is 395 and difficulty is at another new all-time high of 53.35T.
Hashprice
Transaction fees continued falling and BTC price action has been quite weak, pushing hashprice further down. Currently hashprice is at $0,066/TH/Day.
Hashprice is still ~$0,01/TH/Day from the all time low. If BTC price stays bearish and miners keep on deploying hashrate, hashprice might revisit these low levels again.
ASIC Prices
After a small increase, the most efficient machines (under 25 J/TH) dropped further in price over the last weeks. The premium in comparison to the 25 - 38 J/TH continues to diminish. These most efficient machines are now more widely available. The premium is driven solely by demand, not by shortage of supply anymore.
More exiting than the ASIC prices was Blockstream unveiling its long-awaited ASIC. This machine is expected to be launched in 3Q of 2024. Striking is the design which deviates from the ‘traditional’ shoe-box format used by most manufactures currently. Innovation in design is very welcome but might mean challenges when miners want to replace other ASICs in their racks with these machines.
The launch of this new miner might seem far away but development and production takes time. If this ASIC will become a success will largely depend on the market conditions of mining at the time Blockstream releases the miner. But with a $125M raise in January and plans to raise even more capital to fund its mining business, the company is making serious moves.
Fleet management plays a vital role in various industries, encompassing the coordination and oversight of a fleet of vehicles owned by a company or organization. Do you want to explore its key aspects and how they relate to managing a fleet of ASICs? Check out last week’s article.
Fun Fact
CoinMetrics came out with another great report. They introduced a methodology to determine the market share of every major ASIC model. You can see that Bitmain is the most dominant player with around 80% of the marketshare. The S19 & S19J Pro series of Bitmain are most popular. The amount of S19XP’s that came online grew at a rapid pace over the last few months. The Whatsminer M50s remain below the tolerance level for detection. The chart also shows how the S9 dominance decayed over the last few years.
Hashrate Index reported that Bitmain’s Antminer S19 series model continues to lead the buy side demand (~55%) on the Luxor RFQ marketplace. In May, the S19j Pro models consisted of 35% of the total hashrate sold. Whatsminer’s M30S++ represented 22% of the total closed volume.
Bitcoin miners eye grid flexibility role as regulators scrutinize access
Camilla Naschert - 19 June 2023 (S&P Global Commodity Insights)
Owners of datacenters and crypto mining operations are claiming that their businesses, far from being a drag on electric systems, can help integrate renewables and balance grids.
Gas, Bitcoins and Artificial Intelligence: they seek to reduce the environmental footprint of Vaca Muerta, Argentina
Sergio Serrichio - 17 June 2023 (Infobae)
With the fluid that is vented, Unblock, a local partner of Crusoe Energy Systems, from the US, will generate energy to mine crypto and meet the explosive demand of the new technological boom.
Soluna Bolsters Revenue Potential with Purchase of more than 8,250 Machines to Power Project Dorothy 1B
Sam Sova - 14 June 2023 (Soluna Website)
Soluna Holdings, Inc., the parent company of Soluna Computing, announced the purchase of 8,250 Bitmain Antminer S19s, S19j Pro and S19j Pro+ for its Project Dorothy 1B data center in Texas. The purchase is estimated to result in 860 PH/s of hashrate with an average efficiency of 29.9 J/TH, and at a cost of $11.25 $/TH inclusive of all fees, import, and taxes.
Bitcoin Miner Crusoe Energy Secures 50 BTC on Newly Launched Liquidity Platform Block Green
Eliza Gkritsi - 14 June 2023 (Coindesk)
Block Green aims to unlock liquidity from institutional investors for miners and incentivize green mining.
Bitcoin Infrastructure Firm Blockstream to Unveil Its Long-Awaited Mining Rig in 3Q of 2024
Frederick Munawa - 13 June 2023 (Coindesk)
Bitcoin infrastructure firm Blockstream expects to unveil its long-awaited ASIC miner – a culmination of years of engineering work – around the third quarter of 2024, according to Blockstream CEO and co-founder Adam Back
Bitcoin infrastructure expansion and its global impact with Medi Naseri
Drilling into Crypto
In this episode we welcome co-founder and CEO of Lincoin Technologies, Medi Naseri. Medi is a Ph.D. with a focus on electrical and systems engineering. Medi is an active builder in the bitcoin industry addressing challenges of energy, power grid stability, and energy management.
022 - State of the Network, News, Tangents, Home Miner of the Week
POD256
With special guests Michael Schmid aka Schnitzel, CTO amazee.io & home miner.
The Future of Bitcoin Mining
Blockware Intelligence Platform
Joe Burnett is joined by Dan and Mitch from Foreman to discuss Bitcoin mining, the energy industry, MicroBT vs Bitmain, and more!
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