Bitcoin Miner Hash Price Has Been Declining Recently

According to Glassnode, an on-chain market intelligence firm, miners have remained under extreme pressure during this drawdown.

To determine the value of the “miner hash price,” a ratio between daily miner revenues and the mining hashrate is used. The “mining hashrate,” defined as Exahash per second (EH/s), is the total computing power connected to the Bitcoin network at any given time. The hash rate reveals the daily rate at which miners can expect to cash in on their investment of computational power.

Here's a graph depicting the movement of this Bitcoin indicator over the entire cryptocurrency's existence:

It appears that the metric's value has been decreasing. | Source: Glassnode

The price of Bitcoin mining hash power, as depicted in the preceding graph, has steadily decreased since the cryptocurrency's inception. This is due to the concept of "mining difficulty," which will be explained below. The Bitcoin blockchain has this feature to ensure validators only mine at the predetermined rate set by the network. With a higher hashrate, miners have access to more computational resources, allowing them to create blocks more quickly. To prevent this, the network increases the difficulty and slows miners down to the necessary rate.

Therefore, the hash rate decreases because miners can only mine the same number of block rewards daily despite the increased hashrate. There are additional factors, such as the 4-year halvings, that halve block rewards.

The price of Bitcoin also plays a role, as it affects the dollar amount miners can expect to earn. The hefty price fluctuations that Bitcoin experiences during bull runs cause the miner hash price to (temporarily) break its downward trend and show some growth. Unfortunately for miners, the hash price has plummeted in recent months as the hashrate has skyrocketed alongside a steady decline in the price. The current Bitcoin miner hash power price is $58.3k per Exahash daily, a new record low.