Bitcoin Miners’ Revenues Drop Over 30% in the Last Six Months: Factors and Future Halving Impac
Bitcoin miners have witnessed a more than 30% decline in revenues over the past six months, with November earnings approximately $270 million lower than October. Despite Bitcoin’s price reaching $38,000, volatile market conditions, intense competition, and rising electricity costs contribute to this downward trend.
Banklesstimes reports a significant drop in miner earnings, reaching $615.1 million in the past month, nearly $300 million less than January when Bitcoin traded below $20,000. While October saw a temporary increase with the second-highest monthly revenue at $885 million, this reversal highlights ongoing challenges.
Analyst Alice Litam from Banklesstimes attributes the decline to factors such as Bitcoin price volatility. Additionally, Galaxy’s earlier report links it to the “incredible increase in network hash rate in the first half of the year.” The hash rate, indicating the computational power used per second, surged due to improved mining economics, excess second-hand ASIC availability, and the integration of new-generation mining facilities.
The impending Bitcoin halving, scheduled for late April 2024, is expected to impact miners further. The halving reduces the rewards miners receive by half, compelling them to upgrade to more efficient equipment, potentially increasing the hash rate. However, JPMorgan analysts predict a 20% decline in Bitcoin hash rate post-halving. They anticipate miners retiring less efficient equipment in April, resulting in a network power decrease. Some miners may struggle due to increased production costs, causing a potential decline in overall mining activity.
