Much has been said about the mass migration of bitcoin miners from China over the last six weeks, but what has gained less attention is the positive externalities the China ban has created for North American mining operations.
With the drop in hash rate, both the mining difficulty and hash rate (seven day moving average) are lower than they were at the time of the bitcoin halving, when the price of bitcoin was $8,800.
One week post-halving event, the seven day moving average of miner revenue was a mere $8.39 million per day and currently, at very similar levels of hash rate and difficulty, miners have made $29.47 million per day on average over the last week.
North American publicly-traded mining companies including Riot, Marathon and Hut 8 have performed particularly well since the halving event, with noticeably large rebounds in share price since May.
Shares of MARA, RIOT and HUT have outperformed BTC by 805.12%, 405.60% and 30.11% respectively since the halving. While undoubtedly the share prices of the three companies have benefited from the lack of accessible bitcoin vehicles available in public capital markets, the vast outperformance against bitcoin during this timeframe displays the optimistic investor sentiment around the industry.
Data from Glassnode also shows that miners have once again become net accumulators of bitcoin over the last month, with miner positions increasing by 2,581 bitcoin over the last 30 days as three straight negative difficulty adjustments have eased pressure on margins for remaining operations.
Relatedly, the Bitcoin Energy Value Indicator, created by Charles Edwards, which estimates the production cost of bitcoin has dropped to $13,966 due to the dramatic decrease in hash rate. This is yet another measure of how profitable mining is for operations which have stayed plugged in during the historic migration event.
The last time there was a disconnect of this size between the production cost estimated by the energy value indicator and the price of bitcoin was in December 2017, at the peak of the cycle, when the price of bitcoin briefly touched $20,000 while estimated energy value was ~$2,300, but this was due to the parabolic increase in price instead of a fall in hash rate, which is what has occurred recently.
What we can broadly take away from this is that we are currently witnessing one of the most profitable times to mine bitcoin ever, and industry stakeholders will not let this gift go to waste.
Some of the biggest winners of the mass mining migration:
North American Miners.