Last month, miners earned an average of $43,600 per exahash per second. This figure stands out as the lowest rate ever recorded. JPMorgan analysts Reginald Smith and Charles Pearce stated that miners’ revenues from block rewards fell to a record low in August.

This low profitability contrasts sharply with the peak in November 2021, when the Bitcoin price reached $60,000. At that time, the network’s hashrate was at 161 EH/s and miners could earn up to $342,000 per exahash per second.

However, currently, with the decline in Bitcoin price and increased competition on the network, miners’ earnings have decreased significantly.

Bitcoin mining profitability is closely related not only to prices but also to the hashrate of the network. Hashrate represents the total computing power used to mine and confirm transactions on the Bitcoin network, which operates on the proof-of-work algorithm.

The higher the hashrate on the network, the more competitive mining becomes and the less likely individual miners are to earn block rewards.

According to JPMorgan’s report, mining stocks lost value as Bitcoin’s average price fell for the third month in a row and the network’s hashrate rose. The total market value of miners traded on 14 US exchanges monitored by the bank fell 15% on a monthly basis to $20 billion.

Interestingly, only three miners outperformed Bitcoin during this period. This shows that many mining companies are negatively affected by price declines and their revenues decrease.

The report also stated that the hashrate of the Bitcoin network was at an average level of 631 EH/s in August. This is 16 EH/s higher than last month and around 20 EH/s lower than pre-halving levels.

Halving is a process in which Bitcoin block rewards are halved, significantly affecting mining profitability. JPMorgan analysts highlighted that mining difficulty also increased by 9% last month and is 4% higher than pre-halving levels.

For a brief period in August, there was an increase in transaction fees to as much as 120% of the block reward. This situation was considered a “positive, albeit small” development for miners.

Miners earn income not only from block rewards but also from transaction fees. Therefore, an increase in transaction fees has the potential to increase miners’ revenues.

However, Bitcoin’s volatility has also increased noticeably. Bitcoin’s annualized volatility increased from 45% in July to 62% in August, according to data from JPMorgan. Volatility refers to the degree to which an asset’s price fluctuates over time, and high volatility means additional risks for investors and miners.

In summary, Bitcoin mining has been going through a difficult period recently. Price declines, increased competition and mining difficulty have significantly reduced miners’ incomes. Despite this, some positive developments, such as the increase in transaction fees, may also be a small glimmer of hope for miners.

The increase in Bitcoin’s volatility shows that uncertainty in the cryptocurrency market continues, and this increases the pressure on miners.