May 7, 2024
Bitcoin Mining Revenue Dips to Yearly Low After Halving
Bitcoin Halving

Bitcoin Mining Revenue Dips to Yearly Low After Halving

After the fourth Bitcoin halving event, daily revenue from Bitcoin mining sharply dropped to under $3 million, down from the previous daily average of about $6 million in the first four months of 2024.

Source: blockchain.com

Effects of the Bitcoin Halving Mechanism

The Bitcoin halving mechanism, designed to limit the issuance of Bitcoin over time, reduced mining rewards to 3.125 BTC from 6.25 BTC on April 20. This change aimed to distribute the finite supply of 21 million Bitcoin over decades.

May Sees Significant Drop in Earnings

While initial excitement surrounding the halving and the launch of Bitcoin Runes temporarily buoyed miners’ earnings, May witnessed a substantial revenue drop. On May 1, total revenue earned from block rewards and transaction fees hit a new low of $26.3 million.

Shift to New Normal

May continued to exhibit similar revenue patterns, signaling a new normal in Bitcoin mining revenue. Interestingly, mining revenue reached an all-time high of over $107 million on April 20 but has since plummeted.

Miners Strategize for Profitability

Anticipating this drop, miners globally have re-strategized operations to ensure profitability in the evolving Bitcoin economy. Many have upgraded their mining equipment to reduce long-term operational costs and maintain competitiveness.

CryptoQuant CEO’s Analysis

CryptoQuant CEO Ki Young Ju estimates that Bitcoin needs to remain above $80,000 to sustain profitability post-halving under current conditions.

Bitfarms’ Efforts

Bitfarms, a Bitcoin mining firm, has allocated $240 million to triple its hash rate, aiming to enhance scale and profitability. Despite these efforts, Bitfarms reported its lowest monthly earnings of 269 Bitcoin in over two years in April.

Conclusion

As Bitcoin mining revenue hits post-halving lows, miners are adapting strategies to navigate the evolving landscape, emphasizing efficiency and cost-effectiveness to remain profitable in the long term.

Image by freepik

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