This article discusses the current state of Bitcoin mining, which is experiencing a significant decrease in activity and a shift in geographic operations.
Decline of Miners' Share in Total Bitcoin Volume
According to blockchain analytics firm Sentora, miner-related transactions currently account for just 3.3% of total Bitcoin volume. This steep decline from last year, when miners contributed over 20% at times, suggests a broader slowdown in miner-driven activity.
Geographical Concentration of Mining in the US
A report from the Cambridge Centre for Alternative Finance highlights the rapid rise of the US as a central hub of Bitcoin mining. The US now accounts for 75% of the global hashrate, a dramatic change following China's ban on mining in 2021 that led to a mass exodus of miners.
Impact of Electricity Costs and Future Trends
The average electricity cost for miners remains around $45 per megawatt-hour, validating long-standing assumptions used by analysts. Electricity represents the bulk of a miner’s expenses, making it critical for determining profitability. Analysts view production costs as key metrics for identifying entry points for long-term Bitcoin investors, which may lead to new patterns in market response to mining dynamics.
The decline in Bitcoin miners' activity and the growing dominance of the US raise questions about future decentralization and potential regulatory implications.
