Bitcoin Mining Revives as Q1 2023 Hashrate Surges
The Q1 2023 Hashrate Index report reveals a significant improvement in the Bitcoin mining sector, with a 31% increase in hashprice and a 35% increase in Bitcoin's hashrate. The report attributes this resurgence to Bitcoin's 70% price rise during the quarter, which helped the mining industry recover from a rough 2022.
Mining margins also improved, with the breakeven power cost for an S19j Pro miner rising from $0.0812/kWh at the start of the year to $0.10/kWh by the end of Q1. This improvement allowed miners with average power costs to operate above breakeven, providing some financial relief.
The report also highlights a stabilization of hosting costs across the US and Canada, with average hosting costs in all states falling below the breakeven cost for an Antminer S19j Pro. Bitcoin miners, who were struggling at the end of 2022, have seen significant revenue increases due to the rise in Bitcoin's price, resulting in improved direct margins and cash flows.
Several miners have also expanded their hashrate, with Marathon and Cipher Mining leading the charge. Marathon's hashrate increased from 7 to 11.5 EH in Q1, while Cipher Mining added 5.7 EH, bringing their total to 83 EH for miners. Global hashrate also increased by 36% from 255 to 346 EH.
Finally, the inscriptions craze has boosted transaction fees for Bitcoin miners, accounting for 7.9% of all transaction volume in Q1. This has set a higher floor for transaction fees, benefiting the mining industry as a whole.