Bitcoin mining energy consumption has fallen to a two-month low, as reported by S&P Global Commodity Insights Bitcoin Energy Consumption Index. On May 8, the energy used for mining Bitcoin was estimated at 916.89 MWh per bitcoin, or a total of 412.6 GWh for 450 bitcoins mined that day. This marks the lowest level of energy consumption since March 7, indicating a significant drop from the post-halving peak of 1,024 MWh per bitcoin on April 20.
The data concerns Bitcoin miners globally, with a focus on the standard usage by those utilizing the Antminer S19 Pro, a popular mining rig.
A notable decrease in Bitcoin mining energy consumption has occurred, influenced by rising power costs which have squeezed the profitability of mining operations. This trend reflects the broader economic pressures and technical evolutions affecting the cryptocurrency mining industry.
The reduction in energy consumption was recorded on May 8, 2024, continuing a trend observed since the Bitcoin halving event on April 19, which resulted in a doubling of break-even costs for miners.
This change impacts Bitcoin mining operations worldwide, with specific reference to the Nordics, particularly Finland, where high power prices have significantly impacted mining profitability.
The decrease in energy consumption is largely due to the increased cost of electricity making mining less profitable, prompting some miners to halt operations. The ongoing maintenance of major power facilities like the Olkiluoto-3 reactor in Finland has further exacerbated the situation by spiking power prices in the region.
Bitcoin halving, which reduces the number of bitcoins mined daily by half every four years, has led to reduced rewards for miners, forcing them to rely more on transaction fees for profitability. The recent volatility in Bitcoin prices and the developmental stage of layer-2 protocols add uncertainty to the future impact of transaction fees on mining rewards.
Moreover, the Renewable Bitcoin Quarq Spreads Index, which measures the profitability of Bitcoin mining considering renewable energy certificates, has shown varying profitability across different regions, with Finland currently experiencing negative spreads due to high power costs.
This downturn in energy consumption for Bitcoin mining could lead to a potential decrease in power prices, possibly allowing for a resumption of mining activities should economic conditions improve. Meanwhile, regions like Sweden and Norway are beginning to see a recovery in mining profitability despite low hydro stock levels keeping regional power prices high.
