A combination of higher transaction fees and a strong bitcoin price has provided miners with some much-needed relief.
Hashprice, a metric developed by Luxor that measures mining profitability, estimates the daily income miners earn in relation to their contribution to Bitcoin’s hash power. In simpler terms, it represents the expected value a miner can earn from 1 TH/s of hashing power per day.
According to Glassnode, hashprice has recently risen to over $62 per PH/s, the highest level seen since mid-December. This increase is being driven by Bitcoin’s surge above $100,000, marking a 56% increase over the past three months. Additionally, the network has seen a slight rise in miner fees, which have reached approximately 12 BTC per day—the highest level in over a month. This uptick is partially due to the growing inscription activity on the network.
After the halving event in April 2024, where mining rewards were reduced by half, hashprice dropped from around $115 per PH/s. For much of 2024, miners struggled with share price appreciation, and mining revenue was below the 365-day simple moving average (SMA). However, since November, hashprice has surpassed this moving average, signaling a bullish shift.
Although the network’s hash rate reached all-time highs, resulting in increased mining difficulty, which typically diminishes mining profitability, miners appear to be in a healthier position this year. European Head of Research at Bitwise, Andre Dragosch, noted in an exclusive statement to CoinDesk that despite the network difficulty increasing, the price of Bitcoin has risen, and transaction volumes have picked up. This combination has led to a recovery in hashprice, encouraging miners to ramp up their hash rates.
Dragosch further added, “Overall, bitcoin miners seem well-capitalized, as evidenced by the continued growth in miner holdings since the start of the year. This suggests that miners are selling less than they are mining daily, positioning themselves for further growth.”
