State of Bitcoin Mining: H1 2022

Bitcoin’s price has tumbled by more than 40% since early May, first exacerbated by the Terra debacle and, most recently, the liquidation risk brewing over centralized lending firm Celsius and crypto hedge fund Three Arrows Capital. However, the network’s hashrate, measured by the sum of the real-time hashrate from the largest 12 mining pools, remained steady between April 30 and June 11, at around 220 EH/s. 

As we previously analyzed, bitcoin dropping to $30,000 could trigger the capitulation of those running old generation equipment from the 2016 - 2018 period. Once it drops below $30,000, the shutdown pressure would shift towards the mid-tier miners launched between 2019 and the 2020 Halving Event. For the top-tier and the newest generation of equipment, they still remain profitable unless bitcoin breaks $10,000, although their profit margin has significantly decreased to about 50%. At a high level, there has been a tug-of-war between the energization of newly arrived miners and the capitulation of older models.