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Why Bitcoin Hashrate Remains Upward amid Bitcoin Price Drop

Amid the latest bitcoin price crash, some Chinese bitcoin miners are selling their second-hand S9 mining rigs for their lack of profitability.

On October 23, the crypto king bitcoin suddenly crashed $500 to a new 5-month low in minutes. Since then bitcoin price has hovered around $7,500 after ditching the $8,000 range.

Running at the current bitcoin price, Antminer S9, once the most popular mining rig and estimated to contribute 50 quintillion hashes per second (EH/s) – about 50% of the network hashrate, are on the verge of losing money.

In the meanwhile, the cheap electricity brought by the rainy season in Sichuan is on the decrease as dry season has started to come back since late October, which will further make mining unaffordable for small miners.

In such a context, many individual miners are either shutting down their machines, or selling their S9 mining rigs in panic. Large mining farms, contracted cheap electricity (mostly below $0.03kW/h), are of course glad to take over these bargains.

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A miner is asking a bigger mining farm owner to take over his 100 units of S9i for nothing but only some BTC in return, saying he cannot afford the electricity bill

The balance of shutdown machines and startup ones partly explains why bitcoin hashrate seems to be immune to the latest market crash and remains on its upward trajectory around all-time highs. Zhu Fa, Poolin’s cofounder, said that the hashrate keeps climbing is a result that high hashrate mining machines have been gradually put into use.

For another, some miners explains that bitcoin is more resilient than other cryptos amid the market chaos, for which miners mining BCH and LTC may switch to BTC mining. It also offers an explanation as why bitcoin hashrate remains stable despite bitcoin price drop.

Data from BitinfoCharts shows the bitcoin network hashrate hit over 110EH/s on October 23, which suggests that more computing power is contributing to securing the bitcoin network, and more miners are interested in the profitability potential of bitcoin mining.

Though miners’ interest in mining doesn’t seem to decline for the moment, while the price drop of bitcoin did put the squeeze on their mining profits. If bitcoin continues to drop, it will drive more miners whose old mining rigs run on electricity that they cannot afford may choose to turn off their rigs.

According to stats from leading bitcoin mining pool Poolin, Antminer T9+, Ebit E9+, Avalon A741, Whatsminer M3 and Antminer S7, which are once the most popular mining rigs, have already in the red at the current prices (calculated based on the current hashrate and the average electricity rates at $0.047kW/h).

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Once rainy season in Sichuan ends and most Chinese miners relocate their machines to thermal power-abundant places like Xinjiang and Inner Mongolia (where electricity price is 2-3 times the price in rainy season in Sichuan at about $0.06kWh), a bunch of mining rigs will lose money based on the current bitcoin price of $7,496, including Avalon A9/A8/A7 models, Inno T2T-25T, Antminer S9 series, etc.

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