Coindesk reports that due to the arrival of the North American summer heatwave and the initial weakening of competition among miners after the halving, the computing power of the Bitcoin network has seen a significant decline in recent weeks. Luxor Technologies, a data analytics platform, pointed out that mining difficulty and competition may also gradually slow down, providing support for Bitcoin market prices.
Summer Bitcoin network computing power declines
Mining difficulty may be lowered
Major miners actively merging and acquiring
Friction between mining companies and politics
With the fermentation of the Bitcoin halving event, the profitability of major miners has also declined significantly over the past two months in this overcrowded industry.
At the same time, even though some miners have upgraded their mining machines on a large scale to resist the continuously increasing competitive pressure, temporarily increasing the computing power of the Bitcoin network, according to the Hashrate Index data, the computing power of the Bitcoin network has been continuously declining since it reached a historic high in May, decreasing by about 10% to 589 EH/s.
The performance of Bitcoin network computing power in the past year
In response, an analyst from Blockware Intelligence mentioned that in addition to this, Bitcoin computing power usually remains stable or declines in North American summers:
ASICs are large, powerful mining machines, and if they do not have proper cooling measures, they can reach very high temperatures.
He added, “Heat dissipation is the primary challenge currently facing Bitcoin miners.”
Luxor analyst Colin Harpe also expressed his agreement:
As we enter the summer in the United States, we expect to see whether the heatwave will force miners to reduce operations, thereby suppressing the growth of computing power, as we saw in 2022 and 2023.
Therefore, miners must face a choice: to consume more electricity costs to create cooling measures, or to reduce the scale of operations to lower operating costs.
Harpe anticipates that miners in the United States may reduce their operations due to increased energy costs:
If computing power continues to decline, miners may face a lowering of mining difficulty this week, and lower computing power and difficulty may be advantageous for some miners.
He added, “The above data may also lead to a slowdown in the competition in the mining industry.”
Faced with the decrease in profitability of miners after the Bitcoin halving and the current bleak situation in the crypto market, major miners are also committed to further mergers and integration.
Among them, mining company CleanSpark’s latest announcement stated that it will acquire five Bitcoin mining facilities in Georgia for $25.8 million, with the potential to increase the company’s total computing power to over 20 EH/s by the end of June.
Zach Bradford, CEO of CleanSpark, commented:
These locations not only enhance our cooperation with local energy infrastructure, but also ensure the achievement and realization of our mid-year computing power goals.
On the other hand, the hostile takeover case between mining companies Riot Platforms and Bitfarms continues to smolder.
Last week, Trump met with large mining companies such as Riot Platforms and CleanSpark, promising to protect Bitcoin mining, and expressed hope that all the remaining unmined bitcoins could be mined by American companies.
At a fundraising event and his 78th birthday earlier this month, Trump repeatedly emphasized that he would be the “cryptocurrency president” and end Biden’s war on cryptocurrencies.
Bitfarms
CleanSpark
Riot Platforms
Mining
Bitcoin
Mining company
Miner