Ordinals Steal the Spotlight
Ordinals Steal the Spotlight
While Bitcoin price cools off, hashrate and block size shoot to new highs
The last few weeks, the mining market has cooled off after a surge in Bitcoin price, hashprice, and ASIC prices in January. Ordinals stole the spotlight, and miners are eyeing the transaction fees that could increase with the rising demand for block space. North American miners came back online after a short curtailment and hashrate broke recently. In this market update, I will cover the following topics:
Bitcoin Price
Network Hashrate
Difficulty Adjustment
Hashprice
Block Size & Transaction Fees
ASIC Prices
News Highlights & Must Listen Podcasts
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Bitcoin Price
The price of Bitcoin dropped after news broke that the SEC was targeting crypto staking in a $30 million settlement with Kraken exchange. However, price is still trading above the $21.500 area which has been a significant level in the the past seven months. Additionally, BTC is still trading above its moving averages, which is a positive sign.
Network Hashrate
Network hashrate reached a new all-time high on the 7-day moving average. It broke the 300EH/s level. In the beginning of February, some miners in North America had to curtail as cold weather hit the region. This caused the hashrate to drop by 28 EH/s (~9.4%), after which miners came online again, resulting a V-shape recovery.
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Difficulty Adjustment
At the time of adjustment, hashrate had returned to the same level as it was two weeks / one epoch ago. This resulted in a minor difficulty adjustment of -0.49%. The current difficulty is now at 39.15T, just 0.2T below the all-time high.
Hashprice
Since the last difficulty adjustment was not significant, hashprice mostly followed the price action of Bitcoin. Hashprice has been decreasing in the last few weeks and is now hovering around $0.07/TH/Day. However, when zooming out a few months, you can see that hashprice has been gradually increasing since the FTX drama.
Block Size & Transaction Fees
Over the last few weeks, ordinals have been dominating Bitcoin Twitter. While some argue that putting JPEGs on the Bitcoin blockchain is a waste of block space, many miners are eyeing the fees that are being paid for these transactions.
As blocks get fuller, transaction fees as a percentage of the block reward could increase. Fees tend to rise when there is a high demand for on-chain transactions, and users compete to have their transactions confirmed in the next block. The ordinals craze has caused the Bitcoin block size (the amount of data contained in each block in MB) to increase parabolically. Transactions have not yet caught up with the demand, which is unfortunate for miners.
Would you like to learn more about ordinal NFTs, Inscriptions, and Digital Artifacts? I suggest this great article by the team of Hashrate Index.
ASIC Prices
After several weeks of consecutive increases, hardware prices appear to have plateaued for the time being. When the BTC price surged, there was a short moment of FOMO in the ASIC market, but as the Bitcoin price stalled, so did the reaction of buyers and sellers. New-gen machines are still down 85% from their all-time high, meaning the opportunity to buy low has not passed. ASICs with an efficiency under 38 J/TH are priced at $14.98/TH on the index.
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Public miners increased Bitcoin production, hash rate in January
Ana Paula Pereira - 12 February 2023 (CoinTelegraph)
Core Scientific, Riot, and CleanSpark led the way in increasing Bitcoin production in January helped by better weather conditions and stable electricity prices.
Bankrupt Crypto Lender Celsius Seeks to Raise $14M From Bitmain Mining Vouchers
Jack Schickler - 10 February 2023 (CoinDesk)
The company joins mining firm Core Scientific in trying to offload the assets before they expire, with funds used to repay creditors.
Hut 8 USBTC Announce All-stock Merger
RTTNews - 7 February 2023 (Nasdaq)
Hut 8 Mining Corp. (HUT) and US Bitcoin Corp. (USBTC) Tuesday announced their decision to combine in an all-stock merger of equals.
Kazakhstan's President Signs Legislation to Limit Energy Usage of Crypto Mining
Eliza Gkritsi - 7 February 2023 (CoinDesk)
The president of Kazakhstan, Kassym-Jomart Tokayev, signed into law legislation that will limit the energy used by domestic crypto miners, according to a statement posted on the president's website.
The Future of Bitcoin Mining & Security with Sam Wouters
What Bitcoin Did
Sam Wouters is a Research Analyst at River Financial. In this interview, we discuss Bitcoin’s hash rate: what it is, the factors affecting its growth, what this means for Bitcoin’s security budget, and what this means for Bitcoin’s energy needs.
Why Should You Mine Bitcoin NOW
Blockware Intelligence Podcast
Joe Burnett welcomes Danny Condon, Chief Revenue Officer of Blockware Solutions, for a conversation on why right now is a great time to start mining Bitcoin.
Keeping Operation Costs Slim With Cipher Mining | Tyler Page
The Mining Pod
Today we are joined by Tyler Page, CEO of Cipher Mining. We talk about Cipher’s capital strategy, machine purchases and growing its operational footprint across Texas.
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