Bitcoin Mining Capacity: A Margin Trap Looms as Idle Power Returns
Nearly one-fifth of all Bitcoin mining power is currently idle, and experts warn that turning it back on could trigger a margin trap. According to Luxor's September report, about 235 exahashes per second (EH/s) of capacity in specialized Bitcoin mining machines is sitting idle.
The report breaks down the reasons for this idle capacity into several categories: uneconomic machines, deliberately curtailed equipment, machines in transit or under maintenance. The different reasons for switching off make a rebound in hashrate an ambiguous signal of recovery from financial distress.
August's Bitcoin rally improved the revenue available from mining, while Texas's summer window for avoiding peak-related transmission charges runs through September. This could eventually add competition for miners that stayed online, but the revenue recovery that encourages a restart may become smaller once enough other operators make the same decision.