Bitcoin Miner Revenue Remains Weak as Price Drop Continues
Bitcoin miners have been one of the hardest hit following the drop in the price of the digital asset. After what can be said to be a wonderful run towards the end of 2021, miners have now gone through a rough patch where their income has plummeted. The previous week would be no different, signaling a continued decline in cash flow from miners, as daily miner earnings remain depressed in the first week of June.
Bitcoin miners take a hit
Bitcoin miners haven’t had the best months now. With the drop in bitcoin price, miners’ earnings have taken a hit. This had seen their daily figures drop to $26 million the previous week and with a 1.47% increase over the past week, miners’ daily earnings had jumped to $27.19 million. That’s a far cry from what miners were earning when the price of the digital asset hit its all-time high.
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In November 2021, when bitcoin was trading up to $69,000 each, daily miner earnings were a cumulative $62 million. This means that miners’ daily earnings have fallen by more than 50% in the past six months alone. This drop in profitability prompted some miners to start selling their holdings to fund their operations.
The percentage of miners’ income made up of royalties remains average at 1.67%. There was no growth in this metric compared to last week, although most had turned green. Transactions per day increased by 0.23% but remain low.
BTC down more than 50% from ATH | Source: BTCUSD on TradingView.com
Daily trading volumes, however, increased last week. A 9.92% increase in trading volumes took it from $4.595 billion the previous week to $5.051 billion recorded last week, becoming the metric with the strongest growth over the past seven days. .
Hashrate takes a dive
The bitcoin hashrate followed the path of daily miner earnings, as it had also been declining recently. Lower mining revenue was the main driver of this hashrate decline. While some miners were able to sell stocks or their BTC holdings to fund their mining operations, others found themselves unable to keep up. As such, they had to unplug their platforms and pull out of the market.
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The result was a 10% drop in bitcoin hashrate over the past month. Block production took a hit because of this, as blocks per hour now sits at 5.85 blocks per hour, which is a decrease of 1.11% from the previous week. Average transactions per block are on the rise, however, registering a growth of 0.23% in the last 7 days.
BTC hashrate drops 10% | Source: Arcane Research
It is expected that more miners with high production costs will stop their operations if there is no improvement in the daily income of miners. At 6.25 BTC rewards per mined block and lower prices, many miners are likely to suffer losses.
A decrease in mining difficulties should take place on Wednesday, hopefully triggering a rally in the hashrate.
Featured image from Coingape, charts from Arcane Research and TradingView.com
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