Analysis: Bitcoin miners face declining profits

On June 25, Bitcoin miners 'income continued to decline over the past year. The current moving average daily income on the 7th is about US$30 million, which is significantly lower than the level of more than US$50 million last summer. Among them, the transaction fee contribution has dropped to less than US$250,000 per day, which is almost negligible compared to block subsidies. At the same time, bitcoin prices are around $62,500, below JPMorgan's estimated production costs of about $78,000. This price has been lower than production costs for five months, the longest time for this cycle. Historically, production costs have often been regarded as the soft bottom area for Bitcoin prices. It is currently estimated that about 20% of miners are already losing money at current prices, and the pressure is beginning to be reflected at the network level. In the past six months, the sensitivity of mining difficulty to Bitcoin prices has increased to 0.62, indicating that high-cost miners are increasingly inclined to switch mining machines based on price fluctuations rather than continue to lose money mining. In the second week of June, the difficulty of mining Bitcoin dropped by 10%, the second time this year that a similar reduction has occurred. There was an adjustment of the same scale in the previous quarter, and both times occurred when prices continued to be lower than production costs, indicating that pressure on miners is deepening.