The Weekly Hash, 3/31/21
Price response to PayPal’s crypto news enhances mining margins

Bitcoin gained 7.6% week on week (WoW), recovering from a recent dip to ~$52,000 back to $58,685 as of midnight UTC on 3/30. PayPal recently announced support for submitting payments with crypto, in essence allowing purchases via BTC, ETH, BCH, and LTC.

Total BTC earnings per PH/s are ~6.36mBTC, up from ~6.23mBTC / PH/s last week on increased Tx fees. (1mBTC or milliBTC = 1/1000 BTC.) Transaction fees (Tx fees) rose 193 bps WoW to 9.6% of miner rewards, as we see moderate congestion in the “Mempool,” with 60k pending transactions.

Bitcoin mining revenue reached $373/ PH/s per day and $405/MWh, due to spot price and Tx fees edging up.

The BitOoda North American Hash Spread™ gained 11.5% WoW from $349 to $389 as BTC price recovered and power prices remained low.

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. Bloomberg data shows a weighted average around the clock U.S. wholesale industrial power price of $15.37 / MWh, leading to an aggregate spread of $389 across 5 power markets. Note that power prices are highly variable, with northern New York at $5.49 / MWh and Midwest Indiana at $23.18.

Older-generation S9-class devices, which are much more sensitive to price fluctuations, saw their Hash Spread™ gain ~17% to $98 / MWh. S17-class devices, the bulk of the current installed base, see a hash spread of about $280 / MWh.

We estimate that the Bitcoin mining network currently consumes about 6.8GW of power. In our view, the rotation of Hashpower into next-gen equipment continues to drive overall mining efficiency gains. As we have previously noted, luck may also play a role in this estimate.

The current observed Hashrate of ~159 EH/s implies ~147 MWh power consumption per Bitcoin mined using S19 rigs, and substantially more if using older-generation equipment. The next difficulty reset on 4/1 could see the target Hashrate hit a new all time high of ~165 EH/s, resulting in further increases in MWh consumed per BTC.

Current mining economics leave a significant margin of safety for miners, who can absorb both power price and Bitcoin price fluctuations, even as we expect total network Hashrate to continue to increase.

The 147 MWh of power consumption per BTC mined translates into $2,229 in power expense mining with S19-class rigs, based on our current average North American power price. It costs $7,927 using S9 rigs, still an 85%+ margin, excluding labor. As a rule of thumb, we estimate labor costs to be (very) approximately $1000 / BTC for S19-class rigs, about $1500 for S17-class rigs, and $4000 for S9-class rigs.

Key Takeaways

News flow continues to be supportive of a long-term investment case for Bitcoin, with increasing acceptance of BTC both as an investment / inflation hedge as well as for payments.

Mining margins remain robust, with Hashrate growth lagging behind price appreciation

Mining is an attractive way for investors to gain exposure to Bitcoin, although mining rig shipping delays enhance price and difficulty risk.

We can help clients manage risk through compliant, systematic, rigorous hedging programs.

Email us at to discuss how we can help manage your risk or gain exposure to the space.



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A boutique digital asset investment bank focused on providing innovative and compliant capital markets solutions for institutional clients.