Research: the Antminer Profitability Crisis

Written by Lisa

December 28, 2022

antminer

CryptoSlate’s analysis of the Antminer S9 and the Antminer S17 profitability shows trouble ahead for strained miners.

Bitcoin’s fall from its all-time high to a low of $15,700 has been one of the most dominating narratives this year. Bitcoin lost 75% of its value since Nov. 10, 2020, and over 65% since the beginning of the year.

However, the disparity between Bitcoin’s price and hash rate is a much more remarkable story than the currency’s volatility.

The hash rate of Bitcoin hit an all-time high of 271.8 EH/s despite losing nearly three-quarters of its value in a year. There has never been a bear market before where the hash rate and price have diverged in this way.

The divergence between Bitcoin’s price and its hash rate in 2022
The divergence between Bitcoin’s price and its hash rate in 2022 (Source: Blockchain.com)

Comparing the skyrocketing hash rate to miner earnings makes it even more anomalous. Prior research by CryptoSlate into miner revenue revealed that, despite being carried out by the biggest and most productive mining operations, profits are still declining.

The analysis of two well-known Bitmain miners by CryptoSlate presents a dismal picture of the mining sector. The Antminer S9 and Antminer S17 demonstrate that the machines have a difficult time being profitable.

The 2017-released Antminer S9 maintained a profit despite years of market turbulence. The S9’s profitability, however, started to decline as the world’s hash rate increased in 2020, and it finally stopped being profitable in May 2022, when almost all machines were removed from the network.

Mining profitability for the Antminer S9 in 2022 (Source: Glassnode)
Mining profitability for the Antminer S9 in 2022 (Source: Glassnode)

For the Antminer S9 to turn a profit again, Bitcoin’s price would have to rise above $19,000, with an all-in sustaining cost of about $0.05/kWh.

Even today, the Antminer S17 is profitable. The S17, which was introduced in 2019 as a more potent version of the S9, generated a maximum hash rate of 56 TH/s. Given the current price of bitcoin and the rising hash rate, the S17 is only profitable at a rate of $36 per day. Nearly every day, this meager profit has been shrinking, and in the upcoming weeks, it is anticipated that it will decrease even more.

The S17 has experienced profitability issues all year. The S17 became unprofitable for the first time ever after the Terra collapse in June 2022, when Bitcoin fell well below $16,000 and the market lost billions.

Daily profits of various Antminers in 2022 (Source: Glassnode)
Daily profits of various Antminers in 2022 (Source: Glassnode)

The S17’s financial viability is currently under question due to the ongoing market volatility and the constantly rising hash rate. Looking at the S17’s profitability graph reveals that it is following a similar pattern to the S9 in terms of trend.

If Bitcoin fell below $15,500, the S17, which is currently barely breaking even, would become unprofitable. Millions of S17s may be unplugged if miners surpass the $15,500 barrier.

Mining profitability for the Antminer S17 in 2022 (Source: Glassnode)
Mining profitability for the Antminer S17 in 2022 (Source: Glassnode)

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