- The network hashrate rose to a record high of 742 EH in September.
- This increased mining costs and reduced miners’ profits, tipping them to sell 3,000 BTC.
Bitcoin [BTC] Miners had a rough start in September as the network’s hashrate hit a record high and revenues came under pressure. The network hashrate tracks the computing power required to mine BTC. On September 1, the metric reached an all-time high of 742 EH.
Source: CryptoQuant
The record hashrate is excellent because the network security is much better than before.
However, the network problemswhich tracks how hard it is for miners to find the next BTC block, remained near a record level of 90 trillion.
Put another way, miners needed more computing power to mine Bitcoin, which was becoming increasingly difficult to find. In short, the average production cost of mining a single BTC would potentially increase. This could put more pressure on small-scale miners.
Total production from September 3 costs to mine a single BTC was estimated at $71.5K. The average spot price for the asset on the same day was $57.4K. That’s a shortfall of +$14k to mine one coin.
Source: MacroMicro
The BTC price tends to rise near the cost of production in the long run. However, the huge difference in early September put pressure on miners’ profits. Miner daily gain had fallen from more than $36 million at the end of August to about $26 million in September.
As a result, miners could be forced to forgo their BTC holdings to cover higher production costs amid declining revenues.
According to data from CryptoQuant, the Miner Reserve has fallen from 1.817 million BTC to 1.814 million coins in recent days.
The metric tracks the total BTC held by miners, and showed an upward trend in August. This meant that miners held their mined BTC and, by extension, painted a slightly bullish outlook for the BTC price.
Source: CryptoQuant
Read Bitcoin’s [BTC] Price forecast 2024–2025
However, at the end of August the trend reversed, causing miners to sell some of their holdings. So far in September, miners have sold 3,000 BTC, likely to cover rising operational costs.
At the time of writing, BTC was valued at $57.9K. A continued small sell-off could put more downward pressure on the BTC price. That’s why it’s worth watching this front alongside macro updates.