Bitcoin hash price falls as miners face possible 30% energy tax

Bitcoin’s (BTC) hash price has fallen significantly in recent weeks, falling to early January levels – a potential sign that mining may be over.

Hashprice measures the market value of each unit of hash power. BTC’s price determines Hashprice’s value along with network issues and transaction fees.

With BTC’s network difficulty rising to new all-time highs and the asset’s value falling to a two-month low, miners may face a tough time as the hash price fell to $61.38/PH/Day, according to hashrate index data.

What does this mean for miners?

Hashrate Index researcher Jaran Mellerud said Bitcoin’s mining difficulty and hashrate rose by over 20% in 2023 after the digital asset improved its price performance.

He noted that BTC’s performance incentivized many marginal operators to turn on their machines, increasing market competition.

However, the flagship digital asset’s crash below $20,000 has erased half of the gains it made in 2023. This means miners are facing a 2022-like situation where BTC’s falling value made mining unprofitable.

Mellerud highlighted that BTC’s hash rate is likely to increase as more miners plug in their machines in the coming months. Already, several miners have revealed intentions to increase mining capacity by bringing more units online.

Mellerud added:

“If the hash price is to stay at the current level, Bitcoin the price must increase considerably… The latest hash price development shows the importance of securing income.”

Miners Face 30% Crypto Mining Tax

The plight of US-based BTC miners may be exacerbated by the proposed 30% taxation of all energy costs involved in cryptocurrency mining.

US President Joe Biden’s 2024 budget plan included a new crypto mining tax proposal. The government said that crypto mining requires colossal energy use and can harm the environment. It added that mining operations could increase electricity prices and cause uncertainty around local power plants.

CEO of the Satoshi Act Fund, Dennis Porter, described the proposal as “unfair and targeted discrimination”. He added that the tax would “effectively kill Bitcoin mining in the United States.”

Public Miner’s Storage Tank

Following the series of events, the shares of several Bitcoin miners have fallen over the past 24 hours.

According to Google Finance data, Riot’s stock is down 12.22% to $5.53, while Hut 8 shares fell 14% to $1.75. Marathon Digital and Canaan also saw their shares fall by 11% and 7% respectively.