North American heatwave may boost Bitcoin miners‘ profits as many shut down operations.
Bitcoin miners are anticipated to experience an increase in profits as a result of the extreme heat that typically occurs in North America during the summer, which may necessitate the shutdown or cooling of their operations.
The United States (US) is recognized as the location of the majority of Bitcoin miners, as evidenced by data from the University of Cambridge, which indicates that approximately 37% of Bitcoin mining occurs in the US.
This development is noteworthy because Bitcoin miners were already experiencing a profit compression, primarily due to the halving event, which reduced their mining rewards by 50%. Bloomberg stated that these miners may experience a revenue loss of up to $10 billion as a result of the halving event.
Therefore, the reduction in the number of miners during this period will unquestionably be a source of relief for those who perceive it as an opportunity to compensate for some of the anticipated losses.
According to data from CoinWarz, Bitcoin’s hash rate, or computing capacity, has continued to increase throughout the year, reaching an all-time high (ATH) of 835.86 EH/s, indicating that these miners have also encountered increased competition.
Blockware analysts also emphasized the impact of the summer heat on Bitcoin miners, asserting that heat mitigation is the “most significant” operational challenge these miners encounter.
The Application-Specific Integrated Circuit (ASIC), the device that these miners employ for mining, is reportedly capable of attaining “very high temperatures” in the absence of appropriate cooling measures.
Blockware has observed that this situation becomes increasingly problematic during the summer months, as numerous miners are compelled to reduce their operations partially as a result of scorching.
Residential energy consumption also reaches elevated levels during these summer months, which is sufficient to “activate demand response clauses in miners’ power purchase agreements.”
The extreme heatwave in the United States is also anticipated to result in a substantial decrease in Bitcoin’s hash rate. Blockware observed that the hash rate has stagnated or decreased in the past two years during the summer months in North America due to the reduction of mining operations by miners.
The ongoing miner capitulation caused by the “crunched profit margins” from the halving event, as well as the heat-induced curtailments, are expected to result in another “summer of flat hash rate/difficulty growth” according to these Blockware analysts. Bitcoin’s hash rate has been decreasing for some time and is presently at 624.63 EH/s.
