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Cryptocurrency News Articles
Hut 8's Bitcoin Production Tanks After Halving
May 07, 2024 at 01:20 pm
Major crypto mining firms, including Hut 8 and Riot Blockchain, have reported significant declines in Bitcoin production for April due to the halving event and operational adjustments. Hut 8 witnessed a 36% drop in BTC mined, while Riot experienced a 12% decrease. The halving, which halved block rewards, has contributed to these reductions, along with a decline in profitability as the hash price has plummeted by 87.5% from its 2021 high.
Hut 8's Bitcoin Production Dwindles Post-Halving
Toronto, May 6, 2024 - Hut 8 Mining Corp., a prominent player in the American cryptocurrency mining industry, has announced a significant decline in its proprietary production for April.
The company reported a 36% reduction in Bitcoin (BTC) mined in April compared to March. This drop is attributed primarily to the relocation of over 25,000 mining machines from facilities in Nebraska and Texas, which were acquired by Marathon Digital Holdings.
In April, Hut 8 produced 148 BTC against 231 BTC in March, as its deployed hash rate fell from 5.4 EH/s (exahashes per second) to 4.5 EH/s.
"Amidst the halving event, our team's operational expertise enabled us to maximize deployed hash rate as we completed the relocation of our fleet from hosted to owned facilities and brought new capacity online," stated Asher Genoot, CEO of Hut 8.
Industry-Wide Production Decline
Hut 8 is not the only major Bitcoin mining company to report a reduction in output. Other public mining firms, including Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf, also reported production declines ranging from 6% to 12% in April, as per industry outlet The Miner Mag.
The halving on April 20th halved the block reward to 3.125 BTC, which subsequently reduced the mining output to approximately 450 BTC per day from 900.
However, the BTC fee market briefly offset the halving's impact when Bitcoin Runes were launched, boosting demand for block space. Nevertheless, as the recent meme asset craze wanes, BTC production rates are expected to continue declining, potentially leading to increased miner selling.
Fees Supplement Miners' Income
Notably, building applications on Bitcoin has significantly altered miners' income streams. Transaction fees now constitute over 7% of their total revenue, up from 1% two years ago. This trend has persisted for the past four weeks, potentially strengthening the network's fundamentals.
Riot Blockchain's Production Update
On May 6th, Riot Blockchain also reported its April production updates. The firm experienced a 12% decrease in BTC production in April, with 375 BTC produced compared to 425 in March. Nonetheless, Riot anticipates its self-mining hash rate capacity to reach 31 EH/s by the end of 2024, more than doubling its current capacity.
Profitability Reduction
The output reductions have coincided with a decline in profitability, referred to as 'hash price.' According to Hash Rate Index, the current hash price is a mere $0.05 per terahash per second per day.
It has plunged by 72% from a peak of $0.182/TH/s/day around the halving period and has plummeted by 87.5% from its 2021 high of approximately $0.400/TH/s/day.
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