Bitcoin miner profitability could double after record mining difficulty drop

According to some mining websites, profitability for active Bitcoin miners could double after the mining difficulty was adjusted 28% on July 3.
The North American hash spread — an index created by digital asset financial services platform BitOoda that measures the difference between bitcoin mining revenue and the cost of electricity required per megawatt-hour — nearly doubled, from $225 to $449.
“The economics of mining have improved dramatically,” Sam Doctor, chief strategy officer at BitOoda, wrote in a newsletter on Monday.
Such predictions come after a record-breaking adjustment to the difficulty of mining on the bitcoin blockchain. The adjustment process is programmed into the network’s original programming and is designed to stabilize the blockchain by incentivizing miners to return to the network when hashrate, the amount of computing activity used to secure data and finalize transactions, drops significantly.
China’s recent regulatory crackdown on the cryptocurrency industry has forced many miners to shut down, cutting total hashrate by more than half from its record earlier this year. On Friday, before the difficulty reset, the seven-day average hashrate fell to 84.3 EH/s, the lowest since September 2019. But it has since jumped back to around 90.7 EH/s, according to Glassnode.
According to Glassnode’s analysis, miners may see profitability levels similar to April, when Bitcoin was trading at nearly double its current price. Although prices are much lower now, fewer miners are sharing in the revenue.
Meanwhile, prices have fallen as some Chinese miners have been selling their machines at a discount. The resale value of newer and next-generation mining machines has fallen by 32%, while the price of the oldest machines has fallen by 36%, according to Luxor Mining.
Industry experts say remaining miners will continue to see improved profitability until infrastructure catches up.
Nick Spanos, co-founder of Zap Protocol, an infrastructure provider for decentralized applications, said: "Bitcoin mining has become both easy and profitable. This is a recipe for attracting more miners to turn on their machines again." (CoinDesk)