Ethereum’s hashrate has dropped in the past month from 294 Terahashes to a low of 246 TH/s, down to February levels.
Making this the biggest drop in ethereum’s hashrate certainly in the past year, but perhaps even since ethereum’s invention in 2015.
That means ethereum mining has now become unprofitable for many, with plenty seemingly turning off their GPUs or sending them to other coins.
That’s because ethereum’s price has fallen considerably in the past month, from around $400 to a low of $167 before recovering somewhat to $220.
Miners, therefore, might not be able to cover their costs, with some potentially closing shop while others try to survive on rainy day funds.
Which may mean ethereum may have now reached the cost of production floor, similar to bitcoin in 2014-15 when it likewise saw a considerable fall in its hashrate, with a number of bitcoin miners filing for bankruptcy back then.
There were recently some suggestions that super efficient asics have been developed for eth, but the data is not showing that to be the case.
In bitcoin, for example, where a number of new very efficient asics have been showcased, hashpower has been jumping. You’d expect the same for eth if new efficient asics had been developed, but hashpower for ethereum has been falling.
That may mean such rumors do not have ground in reality, but what might have ground in reality is the suggestion that miners many now be facing crunch-time.
If they are not hurting already, they may do soon enough when issuance is reduced by 33%. Assuming price remains static, then that would reduce miner’s fiat revenue by 33%.
Price, however, is quite volatile. Some smart miners therefore might make it at the other end in better shape, but those that have not planned for the risks might find themselves under water.
Because Proof of Work (PoW) mining is a very competitive business, with the design of the network focused on making miners self-organize without any central coordination. That means some fall off the carousel, while others climb, but the wheel keeps on revolving.