The profitability of Bitcoin mining has significantly decreased, nearing an all-time low, based on data from the Bitcoin Hashprice Index. Miners are currently earning $57 per petahash per second (PH/s) per day, a substantial drop from the peak earnings of $3,500 witnessed in late 2021. This decline is attributed to various factors including the recent halving event on April 20, 2024.

The halving cut the rewards for miners in half, making it more challenging for them to earn as before. Additionally, the increased complexity of mining operations and reduced transaction fees are putting further pressure on profitability. Though transaction fees briefly spiked to $128 on the day of the halving due to heightened activity related to the Runes protocol launch, they stabilized at $12 afterwards.

The cost of mining a single Bitcoin has also risen significantly, with estimates showing an increase from $29.5 thousand in Q4 2023 to a projected $53 thousand post-halving. Consequently, mining companies such as Bitfarms in the US are investing heavily in more efficient equipment to mitigate the impact of the halving, with plans to spend $240 million on this.

Overall, the mining sector faces substantial financial risks, with potential losses of $10 billion from reduced earnings and an additional projected decrease of $11.5 billion in Bitcoin issuance rates. The industry is at a critical juncture, requiring significant adjustments to navigate through the mounting challenges.