Bitcoin Hashrate May Finally Slow as Miners Face Scorching Summer Heatwaves

The
unrelenting
growth
of
Bitcoin’s

(BTC)
hashrate,
or
computing
power
of
the
network,
may
finally
slow
down,
giving
miners
some
reprieve
as
extreme
summer
heatwaves
force
curtailments
of
some
operations.

Miners
have
seen
their
profit
margins
squeezed
in
an
already
overcrowded
sector
after
the
halving
cut
their
mining
rewards
by
50%
while
hashrate
kept
hitting
new
all-time
highs.
Among
the
main
reasons
for
growing
hashrate:
previously
purchased
mining
rigs
are
coming
online,
and
the
miners
have
been
scrambling
to
upgrade
their
fleet
with
more
efficient
rigs
to
stay
profitable
after
the
halving.
On
May
25,
for
example,
hashrate
climbed
to
a
record
high
of
658
exahash
per
second
(EH/s),
according
to
Luxor’s
Hashrate
Index
data.

However,
this
unrelenting
growth
is
poised
to
slow
down
for
the
next
few
months
as
North
America
enters
the
summer
with
is
associated
heat
waves.
Miners
use
extremely
powerful
machines
that
give
off
a
lot
of
heat
as
a
result
of
their
computations.
“The
number
one
operational
challenge
for
Bitcoin
miners
is
heat
mitigation,”
said
Blockware
Intelligence
analysts.
“ASICs
are
large,
powerful
computers
that
can
reach
very
high
temperatures
without
proper
cooling
measures
in
place.”

Mitigating
this
heat
becomes
an
even
greater
issue
during
summertime
as
the
companies
need
more
power
to
cool
their
machines
and/or
shut
down
operations
due
to
high
demand
from
energy
consumers
cranking
their
air
conditioning.
“Many
miners
have
to
curtail
operations
[during
summer
months]
in
part
due
to
overheating,
but
also
due
to
residential
energy
consumption
reaching
high
enough
levels
to
activate
demand
response
clauses
in
miners’
power
purchase
agreements,”
Blockware
added.

This
seasonal
phenomenon
has
resulted
in
lower
hashrate
over
the
past
two
summers
and
the
lower
hashrate
means
a
decline
in
the
difficulty
of
mining
a
bitcoin
block.
“As
we
enter
the
summer
months
in
the
United
States,
we’re
keen
to
see
if
hot
weather
will
force
miners
to
curtail
and
thus
suppress
hashrate
growth
as
we
saw
in
2022
and
2023,”
according
to
a
June
17
report
by
Colin
Harper,
head
of
content
and
research
at
Luxor
Hashrate
Index.

In
fact,
the
hashrate
has
already
started
to
come
down
since
reaching
an
all-time
high
in
March.
As
of
June
17,
it
is
lower
by
10%
to
589
EH/s,
according
to
Hashrate
Index
data.
Since
most
miners
are
located
in
the
U.S.,
particularly
in
steamy
Texas,
companies
in
North
America
shutting
down
their
operations
will
likely
make
a
dent
in
the
hashrate
growth.
“According
to
data
from
the
University
of
Cambridge,
roughly
37%
of
all
Bitcoin
mining
takes
place
in
the
United
States,”
said
Blockware.
“As
summer
continues
heating
up,
it’s
reasonable
to
expect
US-based
miners
to
have
heat-induced
curtailments.”

The
lower
hashrate
and
difficulty
could
be
a
positive
outcome
for
some
miners
as
competition
ramps
down
for
the
summer.
Additionally,
some
miners,
such
as
Riot
Platforms
(RIOT),
will
be
able
to
earn
extra
income
from
the
power
grid
by
curtailing
their
operations
as
part
of
their
power
purchase
contracts.

Luxor’s
Harper:
“If
hashrate
continues
to
stoop,
then
miners
may
be
graced
with
a
negative
[difficulty]
adjustment
this
week
–
here’s
to
hoping!”

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