The Weekly Hash, 2/16/22: Target Hashrate Could Breach 200EH/s at Next Reset; Hash Spread Down as Power Prices Rise
Our current target Hashrate analysis calls for a back-end loaded growth in network Hashrate to 327EH/s by the end of 2022. However, the network looks on track to breach 200 EH/s at the upcoming reset, up about 26EH/s YTD and ahead of our model. Click here for the full report.
Bitcoin rose marginally week-on-week (WoW) to $44,511 as of last midnight UTC, but has since pulled back to $43,662 as of this writing.
Total BTC earnings per PH/s are ~4.76 mBTC, down fractionally from last week’s ~4.78 mBTC / PH/s (1mBTC or milliBTC = 1/1000 BTC). Transaction fees fell 36 bps WoW to 1.1% of miner rewards, or 0.07 BTC per block. The “Mempool” shows modest congestion, at 8,285 pending transactions, down from 10,516 last week.
Bitcoin mining revenue rose slightly to $212 / PH/s per day and $231/MWh, as of last night, owing to the higher BTC price, but fell slightly as of this morning as price retreated. The block pace is well above par, ahead by 82 blocks. This represents a major catch up — we were 40 blocks below expectations a week ago due to curtailments in Texas. This suggests that the next reset following tomorrow’s also will likely see a 4–5% increase. See our recent report on the role Bitcoin can play in stabilizing the grid here.
The BitOoda North American Hash Spread™ 10% from $181 a week ago to $162. 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. The weighted average around the clock U.S. wholesale industrial power price (5 markets) rose ~$20 to $69.62 / MWh from $49.5 / MWh last week, leading to an aggregate spread of $162. We note that many miners have fixed price power purchase agreements at lower levels, so their experienced profitability should be higher.
Older-gen S9-class devices saw their BitOoda Hash Spread™ down ~63% to $12/MWh — but still positive at power prices up to about 8c/ kWh ($80/MWh). S17-class devices, the bulk of the installed base, saw a Hash Spread of about $76/ MWh.
It now takes 192 MWh to mine 1 BTC using S19-class rigs, while S17-class machines consume 306 MWh, and S9-class, 547 MWh.
During an epoch, variability in MWh / BTC is driven by Tx fee fluctuations; a slight decline in fees leads to a slight week-on-week increase in MWh needed to mine 1 BTC.
The current power prices translates into $13,394 in power expense to mine 1 BTC with S19-class rigs, and $38,101 using S9 rigs, excluding labor.
•Mining margins have mean reverted, with revenue on the 50th percentile
•Our YE 2022 Hashrate estimate of 327 EH/s needs to be considered in evaluating miner investment opportunities — and the current pace of deployments is ahead of our model
•BTC price would need to be ~$75k by year end to match current daily revenue of $212 / PH/s
•Most 2022 Hashrate is already committed and will come online largely independent of price, so miner economics could overshoot to the downside, particularly since deployments are ahead of our model