The Weekly Hash, 1/4/21: Hash trails recent price appreciation: Miner margins and Hash Spreads™ strongest since June 2019

Happy New Year from BitOoda! What a holiday season it has been! Bitcoin peaked at over $34,0000, doubling in the past 5 weeks before giving back some of the gains today. BTC closed yesterday at $33,278, a 26% gain from the prior week. Meanwhile, Hashrate expanded just 6.4%, although the target Hashrate is on track for a 10% or higher reset on January 9th. Total BTC earnings per PH/s are now ~7.14mBTC / PH/s, down slightly from 7.21mBTC last week. (1mBTC or milliBTC = 1/1000 BTC.)

Transaction Fees (Tx fees) dipped 91bps week-on-week (WoW) to 7.9% of miner rewards, which makes sense since the number of blocks mined daily increased 6.8% WoW to 158. Since the halving on May 12, the correlation between daily blocks mined and Tx fees as a % of total mining rewards has been negative 69%, strongly supporting the view that rising network congestion, largely driven by falling aggregate block space when block count falls, is a strong predictor of rising Tx fees.

Bitcoin mining revenue shot up to $238 / PH/s per day and $260 / MWh on robust price performance.

Daily revenue per PH/s gained $67 / day vs. our last publication on December 21, while revenue per MWh gained ~$73 using the latest-generation S19-class rigs.

The BitOoda North American Hash Spread™ rose 29% WoW to $225; it was $146 on December 21.

We define the BitOoda Hash Spread™ as the difference between the cost of power per MWh and the Bitcoin mining revenue per MWh. This gives miners a quick sense of the surplus generated by their business to cover personnel, overhead, depreciation, and profit. EIA data shows a weighted average peak/off-peak U.S. wholesale industrial power price of $34.36 / MWh, leading to an aggregate spread of $225 across 8 power markets, which is 29% higher than 12/28 and 54% higher than 12/21.

Older generation S9-class devices saw their hash spread climb 61% WoW to $38.69 / MWh. S17-class devices, the bulk of the current installed base, see a hash spread of over $155 / MWh.

With spreads so robust, capital investment payback periods are modest: with a secondary market price of $90 for S9-class rigs, it would take just 51 days at current hash spreads to recover the $47.4k equipment cost / MW. With $1900 S17s and $3200 S19s at some online markets, the payback periods are 165 and 141 days, respectively. However, we note that this excludes labor and overhead costs, and are aware that online prices vary considerably and do not imply actual availability. Furthermore, we do expect difficulty to continue to increase at over 100% annually, so the actual realized payback period would likely be significantly longer than the above estimates unless price appreciates at a similar pace from current levels.

Given the short payback period, we continue to be surprised by the current benign Hash and Difficulty environment. Although Difficulty is currently expected to reset ~10% higher on Saturday the 9th, this is still significantly lagging behind the price movements over the past several weeks / months. At this point, daily revenue from the less-efficient S9-class rigs exceeds the cost of power at up to 7c / kWh, which we estimate as nearly the entire global Bitcoin mining network. The strong BTC price supports both internal cash generation and is attracting new capital into the space to fund expansion. So we ask again — where’s the Hash?


The rapid Bitcoin price increase and slow pace of Hash growth has led to extremely strong Hash Spreads,™ well above our expectations. The expected sustained network Hashrate growth is still absent, but we believe it will still catch up over the next few months. Thus, further Hash Spread™ expansion could be dependent on price appreciating faster than new rigs come online.

Long term price growth is supported by news flow about traditional financial institutions creating or approving growing exposure to Bitcoin, so it makes sense for miners to seek long exposure to Bitcoin.

We continue to advise clients to take some risk off the table while locking in advantageous levels of revenue / PH/s and MWh to cover operating and debt service obligations. Email us at to discuss how we can help manage your risk.

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