Comparing hashrate, hashprice and miner balances across Bitcoin cycles

Interest in the Bitcoin mining sector grew exponentially over the past year, which makes it hard to contrast the previous bear market (ca. 2018) for many new participants. The recent growth is seen in the sophistication of financial products, the plethora of publicly traded companies and the diversity of retail-focused mining services, as a few examples.

Even still, comparing mining macro trends–particularly hashrate, hashprice and miner balances–across the two cycles helps contextualize the current bear cycle.

Hashrate

Comparative hashrate growth during the current and prior bear market is perhaps the most interesting mining data set. Not only has the current cycle seen a sustained upward trend despite a brutal bear market. But by the current length of a price downtrend in the past cycle, hashrate had reversed a significant amount of its growth. Current hashrate, however, has barely dipped at all from its level when Bitcoin’s price topped in late 2021. Take the normalized line chart below:

Hashprice

Hashprice–the dollar-denominated revenue per marginal unit of hashrate–also offers a curious comparative dataset. The astronomical collapse of hashprice in 2018 was caused by an influx of new hashrate from the recently-released Antminer S9 models continuing to ship after initial delays. Also, the collapse of Bitcoin’s market price compounded the downward spiral. In 2022, the story is similar, yet with the size of hashrate’s collapse comparatively smaller. Falling from $0.40 to $0.06, miner margins likewise have become heavily stressed just as newer-generation units (Antminer S19 XP, Whatsminer M50S, etc.) come online. The comparative hashprice chart below shows the decline in 2018 and from Bitcoin’s latest record high to date.

Miner balances

Bitcoin miner address balances are a commonly tracked metric during bear markets to have some insight into miner accumulation or selling activity based on coin movements. It should be noted that useful inferences from this data are fairly limited, but it’s not completely irrelevant. The simple bar chart below shows one-hop address balances at the bottom of the 2018 bear market compared to the same balances at the time of writing–the difference between both balances is hardly noticeable. In fact, one-hop balances have started trending upward over the past month.

Given the turbulent macroeconomic headwinds that continue troubling central bankers and other financial leaders, the immediate future of mining economics is uncertain. But the need for Bitcoin–and the mining infrastructure that supports it–is more important than ever. Mining is a ruthlessly competitive industry, and the operators that survive the current market phase will emerge as kings during the next bull market, whenever that may be.