Smaller earnings await crypto miners due to rising electricity costs, volatile Bitcoin price and the Ukraine war.
Competition in Bitcoin mining is fierce. Ultimately, algorithms decide whether you win or not. What matters is the hash rate. When the price of Bitcoin was predicted to hit $100,000 last year, there has been a lot of investment in the industry.
Powered by the hash rate, companies flocked to the stock market. According to Galaxy Digital Research in the 2021 Mining Report, bitcoin miners earned around $3.8 billion last year. But this year things have changed a bit.
It is expected that the global hash rate will experience a decline with the crisis. According to BTIG analyst Greg Lewis, global hash rates have been highly volatile since Russia invaded Ukraine.
Russia had a share of 15 percent in the world hash rate, but this figure decreased due to the war with Ukraine. The energy crisis in the world and increasing equipment prices cause bitcoin mining to be much more costly.