Miners Take a Breather! Report: Bitcoin Hashrate and Mining Difficulty Expected to Drop in Summer, Competition to Ease

Coindesk reported that due to the impact of the North American summer heatwaves and the initial weakening of competition among miners after the halving, the Bitcoin network has seen a significant drop in hashrate in recent weeks. Data analysis platform Luxor Technologies pointed out that mining difficulty and competition may also gradually slow down, providing support for the Bitcoin market price.

Bitcoin Network Hashrate Declines in Summer

As the effects of the Bitcoin halving event continue to unfold, the profitability of major miners in this already overcrowded industry has been squeezed, showing a significant decline in the past two months.

Meanwhile, despite some miners upgrading their mining rigs on a large scale to withstand the increasing competitive pressure, temporarily boosting the Bitcoin network hashrate, data from Hashrate Index shows that the Bitcoin network hashrate has been declining since reaching a historical high in May, dropping by about 10% to 589 EH/s.

In response, analysts from Blockware Intelligence stated that apart from this, Bitcoin hashrate typically remains steady or decreases during the North American summer:

ASICs are large, powerful mining rigs that can reach very high temperatures without proper cooling measures.

They added, "Heat dissipation is the primary challenge facing Bitcoin miners currently."

Luxor analyst Colin Harpe also expressed agreement:

As we enter the U.S. summer, we expect to see if heat waves will force miners to reduce operations, thereby suppressing hashrate growth, as we saw in 2022 and 2023.

Mining Difficulty May Decrease

Therefore, miners must face a choice: to incur more electricity costs to create cooling measures, or to reduce business scale to lower operating costs.

Harpe anticipates that U.S. miners may scale back operations due to increased energy costs:

If hashrate continues to decline, miners may see a difficulty adjustment this week, and lower hashrate and difficulty may be beneficial to some miners.

They added, "The data above, combined, may also slow down competition in the mining industry."

Major Miners Actively Merging and Acquiring

Facing decreased profitability of miners after the Bitcoin halving and the current bleak situation in the crypto market, major miners are also committed to further consolidation and integration.

Among them, mining firm CleanSpark's latest announcement stated that they will acquire five Bitcoin mining facilities in Georgia for $25.8 million, potentially increasing the company's total hashrate to over 20 EH/s by the end of June.

CleanSpark CEO Zach Bradford stated:

These locations not only enhance our cooperative capabilities with local energy infrastructure but also ensure the achievement and realization of our mid-year hashrate goals.

On the other hand, the hostile takeover case between mining firms Riot Platforms and Bitfarms continues to simmer.

Mining Firm Takeover Frenzy! Riot Counters Bitfarms, Continues to Increase Stake to 14%: No Communication Between Both Parties

Conflicts Between Mining Firms and Politics

Last week, Trump met with large mining firms such as Riot Platforms and CleanSpark, promising to protect Bitcoin mining and expressing hope that all remaining unmined Bitcoins will be mined by U.S. companies.

During fundraising events and his 78th birthday celebration earlier in the month, Trump also emphasized multiple times that he would become the "Crypto President," ending Biden's war on cryptocurrencies.

Trump Vows to End Crypto Enforcement War, Advocates for Crypto Industry to Enter Florida