Authored by analysts Reginald Smith and Charles Pearce, the report highlights that during August, Bitcoin miners earned an average of $43,600 per exahash (EH/s) per second in daily block rewards. This figure marks the lowest rate ever recorded.

This stands in stark contrast to the profitability observed in November 2021, when miners earned $342,000 per EH/s, with Bitcoin trading around $60,000 and the network’s hash rate at 161 EH/s.

The steep decline in profitability is attributed to a combination of falling Bitcoin prices and a rising network hash rate, which represents the total computational power used to mine and process transactions on the Bitcoin blockchain.

As a result of this reduced profitability, the market value of 14 U.S.-based mining companies tracked by JPMorgan saw a collective decline of 15%. Only three of these companies outperformed Bitcoin during this period, as the cryptocurrency’s price dropped for the third consecutive month.

The report also notes that August saw a 16 EH/s increase in the network’s hash rate, pushing the average to 631 EH/s, just 20 EH/s shy of pre-halving levels. Mining difficulty, which is closely linked to the hash rate and measures how challenging it is to find a new block, rose by 9% last month and is currently 4% higher than before the halving event.

Despite the grim outlook, there was a brief spike in transaction fees during August, at one point reaching 120% of the block reward. While this temporary increase offered miners some relief, it was insufficient to counterbalance the broader challenges.

Additionally, the report highlights that Bitcoin’s annualized volatility rose from 45% in July to 62% in August, signaling increased uncertainty and risk in the market.

As the challenges in Bitcoin mining continue to mount, the industry is grappling with a more competitive and less profitable environment.

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In a Twitter announcement, an official from the on-chain data and analytics platform CryptoQuant highlighted this unprecedented power requirement.

Bitcoin‘s halving, which occurs every four years, took place on April 20. As of that date, the reward for Bitcoin miners per block was halved to 3.25 BTC. According to CryptoQuant data, for the first time in history, more than 1 EH/s of hash power is required to produce one Bitcoin per day.

Currently, 1.13 EH/s of power is needed to mine one Bitcoin.

While this situation is negatively impacting Bitcoin miners, many companies are preparing to increase their power. Marathon Digital, the largest Bitcoin miner in the US, has announced plans to double its hash rate by the end of this year.

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