As a seasoned crypto investor who has weathered numerous market storms since 2017, I have learned to read between the lines and anticipate the market’s next move. The recent Bitcoin miner revenue drop, while concerning, isn’t entirely unexpected given the halving event’s impact on miner rewards and the subsequent decline in transaction volumes.
Over the course of August last year, I witnessed a significant drop in Bitcoin mining revenue – a decrease of approximately 57% from the peak in 2024. This downturn has left me questioning whether the Bitcoin miner capitulation has truly come to an end or if we’re on the brink of another substantial market sell-off.
Bitcoin Miner Revenue Drop Is A Matter of Concern
Last month in August, Bitcoin miners generated approximately $827.56 million in earnings, marking a 10.5% decrease compared to July’s earnings of $927.35 million. Nevertheless, according to Bitbo data, miner revenues increased by 5% compared to the same period in August 2023.
In August, the income generated from Bitcoin mining had dropped a significant 57% compared to its peak of $1.93 billion in March, which occurred just before the Bitcoin halving event. Interestingly, this decrease happened at the same time as the price of Bitcoin reached an unprecedented high of $73,500.
Previously, Bitcoin mining revenue sank as low as $727.79 million back in September 2023. Interestingly, the amount of Bitcoins mined during August was only 13,843 BTC, a decrease from the 14,725 BTC mined in July.
Due to the Bitcoin halving, the mining difficulty has dramatically increased, reducing miner rewards by half to approximately 3.125 Bitcoins per block. Combined with a decrease in Bitcoin transaction volume, this situation has become challenging for miners.
Conversely, the mining complexity has persistently increased, peaking at an unprecedented high of 89.47 trillion in August. This surge in difficulty resulted in a significant decline in miner profits. Over the course of the recent weekend, Bitcoin miners collectively sold 2,655 BTC, which equated to a massive $154 million in value.
#Bitcoin miners sold 2,655 $BTC over the weekend, worth around $154 million!
— Ali (@ali_charts) September 2, 2024
Due to these advancements, Bitcoin miners are considering additional income sources, like renting out their computing capabilities to the artificial intelligence sector.
1. Leading mining companies such as Marathon Digital are emulating MicroStrategy’s strategy, which includes offering $250 million in convertible notes to acquire Bitcoin from the market. In contrast, entities like Vortex Brands are opting for a more indirect approach by purchasing shares of MicroStrategy as a surrogate wager on Bitcoin.
BTC Miner Sell-off Ahead?
In the quarter after the halving occurred, Bitcoin miners sold more than they bought to meet their expenses. With their income declining now, there’s a possibility that the increased selling of Bitcoin by miners might restart in order to raise additional funds.
Additionally, it’s worth noting that Bitcoin has often seen bearish trends in September, potentially leading to another decrease in price. Added to this, miners are offloading their BTC, which puts additional selling pressure on the market. Consequently, the Bitcoin price is sliding below its crucial support at $58,450, increasing the likelihood of a further drop towards $50,000.
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2024-09-02 12:23