Bitcoin State of Mining

The Macro of Mining

The price of Bitcoin has continued to decline following a string of industry-specific events laid on top of a macro environment dealing with rising interest rates, recessionary red flags, and continued geopolitical conflict. Bitcoin has established a range around $20,000 for the first time since late 2020, after (more or less) declining steadily from November 2021’s high of  $68,789.

Crypto bears and opportunistic media outlets alike have again claimed the great experiment was a failure and that Bitcoin will find its appropriate value somewhere much lower than current prices. Bitcoin has recovered from similar drops in the past, however, while past performance is not an indicator of future performance, it is safe to assume the death of almost 50% of the entire crypto industry has once again been declared prematurely.

According to Bitcoin Obituaries, Bitcoin has “died” 458 times, with 18 instances in 2022 alone. The silver lining here might be that a quick look at the all-time chart for Bitcoin deaths indicates a declining trend for headlines warning about the end times.

While speculative demand has waned recently, miners are continuing to add machines to their fleets as indicated by the growth of the global hashrate. The disconnect between price and hashrate stems from a 12-18 month delivery lag for Bitmain’s S19 series machines, meaning most of the new hashrate coming online today was ordered over a year ago, during the period between Bitcoin’s last two all-time highs.