The Bitcoin mining sector is currently navigating an exceptionally challenging period, characterized by a severe squeeze on profitability that threatens the stability of the entire community. Miners are grappling with an unprecedented combination of market factors that are making it harder and less lucrative to secure the network, pushing earnings to multi-year lows.
The Unprecedented Squeeze on Miner Profitability
Bitcoin miners are facing a formidable dual challenge: record-high mining difficulty alongside an all-time low hashprice. On November 3rd, mining difficulty soared to a record 155 trillion, making the process of earning Bitcoin more competitive than ever before. Simultaneously, the hashprice, which represents the expected daily revenue for a given amount of hashing power, plummeted to an historic low of $34.49 per PH/s – a decline of over 50% in just weeks. This stark reality means miners are incurring higher operational costs to secure the network while simultaneously seeing their potential returns drastically diminished, creating a tough economic environment for all participants.
Plummeting Returns and the Specter of Capitulation
The direct impact of these conditions is evident in plummeting miner profitability, which has fallen to a staggering $0.0334 USD/day per 1 TH/s – the lowest level recorded since 2023. To put this into perspective, a miner with 1 TH/s of power is now earning merely three cents per day. This dramatic reduction in earnings, exacerbated by a post-halving block reward of 3.125 BTC, means miners require significantly higher Bitcoin prices to remain viable. With the cost of mining now estimated at $112k, roughly 1.3 times higher than Bitcoin's current value, the entire mining community is experiencing a profound squeeze, raising the specter of widespread capitulation and potential large-scale miner exits if market conditions do not improve.
