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Cryptocurrency miners saw a modest decline in the number of bitcoins (BTC-USD) mined in September vs. August, as an increase in the network hashrate and difficulty screamed trouble for profit margins.
The so-called difficulty of mining is a closely watched metric in the crypto ecosystem. It measures how hard it is to mine a bitcoin (BTC-USD) block based on the amount of participants and computing power (hashing power) used to mine and secure the blockchain. A high difficulty (as a result of high hashing power), as is the case now, tends to lower miners’ profitability. Difficulty is currenting sitting around record highs at 31.36 trillion vs. 30.97 trillion a month ago, according to data from blockchain.com.
The bitcoin (BTC-USD) network’s hashrate, which measures how much computing power is being used to process transactions on the blockchain, is standing at an all-time high of nearly 255 exahash per second, in a move that underscores margin compression in the mining industry, according to blockchain.com data. That’s up from 225 EH/s a month before.
Despite a backdrop of a higher network hashrate and difficulty along with suppressed bitcoin (BTC-USD) prices, miners’ revenue has edged up in September, rising to $22.4M at the end of the month from $16.6M at the beginning of the month, as per blockchain.com data. Still, that’s down from $40.9M in the year-ago period.
Overall, crypto miners’ bitcoin (BTC-USD) production ticked down 1.1% on average, while the hashrate jumped 10.6%, according to the table below. Some companies cited a shorter month as one of the key issues in less BTC production.
Looking at the miners individually, Marathon Digital (MARA), CleanSpark (CLSK) and Iris Energy (IREN) were the only ones that produced more BTC than the prior month. Note the following miners have yet to report their September numbers: Hive Blockchain (HIVE), BitNile (NILE), Argo Blockchain (ARBK) and Greenidge Generation (GREE).
Furthermore, most miners continued to sell their bitcoin (BTC-USD) holdings as capital dried up amid soaring power prices thus shrinking profit margins. During the month, Bitfarms (BITF) sold 544 BTC, Riot (RIOT) sold 300 BTC, CleanSpark (CLSK) sold 380 BTC, and Core Scientific (CORZ) sold 1,576 BTC.
For Bitfarms (BITF), in particular, SA contributor Gary Bourgeault believes the company’s 10% drop in BTC production “may have been an anomaly.”
“The key for BITF through the remainder of 2022 and early into 2023 will be the CPI release,” he added. “If things are shown to improve, high-growth assets are going to attract more investment, and BITF will benefit from that.”
Take a look at the chart here to see how shares of miners have fared in September compared with bitcoin (BTC-USD).
Earlier last week, (Oct. 6) Grayscale launched a new unit to invest in bitcoin mining hardware in the wake of discounted prices.
| 2022 | ||||||
| Company | Ticker | Type | September | August | July | |
| Marathon Digital | (MARA) | bitcoins mined | 360 | 184 | 72 | 205.3 |
| Bitfarms | (BITF) | bitcoins mined | 481 | 534 | 500 | 505.0 |
| hash rate (EH/s) | 4.2 | 3.9 | 3.8 | 4.0 | ||
| Riot Blockchain | (RIOT) | bitcoins mined | 355 | 374 | 318 | 349.0 |
| hash rate (EH/s) | 5.6 | 4.8 | 4.2 | 4.9 | ||
| CleanSpark | (CLSK) | bitcoins mined | 448 | 395 | 384 | 409.0 |
| hash rate (EH/s) | 4.2 | 3.4 | 2.9 | 3.5 | ||
| Hut 8 Mining | (HUT) | bitcoins mined | 277 | 375 | 330 | 327.3 |
| hash rate (EH/s) | 3.7 | 2.97 | 2.92 | 3.2 | ||
| Core Scientific | (CORZ) | bitcoins mined | 1213 | 1334 | 1221 | 1256.0 |
| hash rate (EH/s) | 13 | 12.69 | 10.9 | 12.2 | ||
| Sphere 3D | (ANY) | bitcoins mined | 11.06 | 12.8 | 12.8 | 12.2 |
| Iris Energy | (IREN) | bitcoins mined | 325 | 301 | 154 | 260.0 |
| Average bitcoins mined | 433.8 | 438.7 | 374.0 | 415.5 | ||
| Average hash rate | 6.14 | 5.55 | 4.94 | |||