August 2024 was the month with the bottom revenues for Bitcoin mining of your entire yr.
Certainly, it’s essential to return even to September of final yr, when the value of BTC was under $30,000, for a month with related revenues.
The collapse of revenues within the Bitcoin mining sector
On Bitbo you’ll find a chart that reveals the month-to-month revenues of Bitcoin mining.
July had closed with roughly 927 million {dollars} collected total by BTC miners, however in August, which has the identical variety of days, revenues dropped by 100 million {dollars} (-10%).
It’s value noting that already in June they’d fallen under 900 million, nevertheless it had been since September 2023 that they’d not fallen under 850.
To inform the reality, a yr in the past they’d additionally dropped under 800, however September has sooner or later lower than August.
Moreover, in 2021, three years in the past, they remained nearly always above 800 million, with peaks even reaching nearly 1,700.
Moreover, through the bear-market of 2022, when the value of Bitcoin dropped considerably under $20,000, the month-to-month income low for mining was reached at $460 million.
So through the course of 2023 these final ones rose from lower than 500 to greater than 1,200 million, reached in December, after which rose once more through the course of 2024 to over 1,900 in March after which collapsed under 900 million from the halving to right now.
Bitcoin mining: the explanations for the collapse of revenues
Earlier than analyzing the explanations for this collapse (-57% from March to August), it’s essential to emphasise that the present ranges will not be solely a lot greater than these of the bear-market of 2022, however they’re additionally completely in keeping with these of July of final yr, earlier than the halving of the premium.
Having stated that, clearly the primary purpose is the halving itself.
Till March of this yr, the miner who managed to mine a block would take house 6.25 BTC as a reward, however from April 20, this reward has been halved to three.125 BTC.
The Bitbo chart additionally reveals the month-to-month earnings in BTC, which embody the charges, and divulges that in March of this yr the Bitcoin miners had earned greater than 28,500 BTC, dropping to 22,600 in April and to lower than 13,800 in Could.
However to this drawback, one other one is added.
In actual fact, the calculation of the overall revenues from Bitcoin mining is definitely finished in {dollars}, as a result of the excessive working prices of miners have to be paid in fiat foreign money.
And so a drop within the common worth of BTC has additional diminished the miners’ revenues calculated in {dollars}, regardless of the BTC earnings in August being completely in keeping with these of Could. Nevertheless, the very fact stays that in BTC the earnings in August had been 51% decrease than these in March.
Issues for Bitcoin?
Regardless of all this, no technical drawback is discovered for Bitcoin.
The block-time, that’s the common time to validate a block, has all the time remained round, or under, 10 minutes, with marginal exceptions, and the variety of day by day transactions continues to be decidedly excessive.
Certainly, if in March a mean of about 400,000 transactions per day had been recorded on the Bitcoin blockchain, these days, the 600,000 mark has typically been surpassed.
A distinct dialogue, nonetheless, is the one which issues the value of BTC.
In actual fact, the extra the revenues of the miners lower, the extra they’re compelled to promote Bitcoin.
Typically, miners promote solely the BTC essential to finance their exercise, attempting to not promote these that aren’t essential to promote. On this means, over time, an accumulation of BTC is created, however when revenues fall, they’re compelled not solely to promote all of the Bitcoin they mine, but in addition a part of these accrued beforehand.
The profitability of Bitcoin mining has actually collapsed these days, dropping from $0.12 per day per THash/s in March to the present $0.04. The present stage is even decrease than, for instance, a yr in the past, and which means miners are actually compelled to promote a whole lot of BTC.
The impression on the value of BTC
All this ensures that the promoting stress of BTC on the crypto market stays important.
Though total it has decreased, from March till right now, it has not decreased as a lot as many had hoped.
In actual fact, the shopping for stress has really decreased extra, and the inevitable consequence is a discount in worth.
To ensure that this pattern to reverse, it might be essential for the miners to cease promoting so many BTC.
For this to occur, at this second it isn’t conceivable that a rise within the worth of Bitcoin alone can be enough. As an alternative, a lower within the problem can be important, in an effort to considerably scale back the bills of the miners.
However, the issue is at present near all-time highs, regardless of the halving that occurred just a few months in the past, a lot in order that the block-time stays near 9 minutes. The speculation is even that the subsequent problem adjustment, scheduled for September 11, might be upward, and if that occurs, the aforementioned drawback can be additional exacerbated.
Hashrate and problem ranges
All that is attributable to a curious dynamic, completely surprising.
In actual fact, with the halving of the reward for miners, in concept, they need to have considerably diminished their hashrate. This might have inevitably led to a discount within the problem, and due to this fact the prices of mining, thus additionally decreasing the necessity for miners to promote BTC.
And but it didn’t occur.
The hashrate in April, earlier than the halving, had exceeded 650 Eh/s of weekly common, and after the halving it had dropped to 580 in Could.
On the finish of Could, nonetheless, it had marked a brand new peak above 650, and in July even a peak above 670 Eh/s.
Nevertheless, on common it has decreased from 640 to 630, which is a discount too small to deal with the inevitable collapse in revenues as a result of halving.
At this level, it might be essential for the miners to begin shutting down a big variety of outdated machines to lower the hashrate, thus additionally reducing the issue, however whoever does this dangers seeing their revenues collapse additional. So long as the miners don’t capitulate, this case appears destined to persist.
