August 2024 was the month with the bottom revenues for Bitcoin mining of your entire 12 months.
Certainly, it’s crucial to return even to September of final 12 months, when the worth of BTC was under $30,000, for a month with comparable revenues.
The collapse of revenues within the Bitcoin mining sector
On Bitbo yow will discover a chart that exhibits the month-to-month revenues of Bitcoin mining.
July had closed with roughly 927 million {dollars} collected general by BTC miners, however in August, which has the identical variety of days, revenues dropped by an excellent 100 million {dollars} (-10%).
It’s value noting that already in June that they had fallen under 900 million, but it surely had been since September 2023 that that they had not fallen under 850.
To inform the reality, a 12 months in the past that they had additionally dropped under 800, however September has in the future lower than August.
Moreover, in 2021, three years in the past, they remained nearly continually above 800 million, with peaks even reaching nearly 1,700.
Moreover, throughout the bear-market of 2022, when the worth of Bitcoin dropped considerably under $20,000, the month-to-month income low for mining was reached at $460 million.
So throughout 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 throughout the course of 2024 to over 1,900 in March after which collapsed under 900 million from the halving to as we speak.
Bitcoin mining: the explanations for the collapse of revenues
Earlier than inspecting the explanations for this collapse (-57% from March to August), it’s crucial to emphasise that the present ranges will not be solely a lot increased than these of the bear-market of 2022, however they’re additionally completely in step with these of July of final 12 months, earlier than the halving of the premium.
Having stated that, clearly the principle cause is the halving itself.
Till March of this 12 months, 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 exhibits the month-to-month earnings in BTC, which embody the charges, and divulges that in March of this 12 months 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 downside, one other one is added.
In actual fact, the calculation of the overall revenues from Bitcoin mining is definitely achieved in {dollars}, as a result of the excessive working prices of miners should be paid in fiat forex.
And so a drop within the common worth of BTC has additional decreased the miners’ revenues calculated in {dollars}, regardless of the BTC earnings in August being completely in step with these of Could. Nonetheless, the actual fact stays that in BTC the earnings in August have been 51% decrease than these in March.
Issues for Bitcoin?
Regardless of all this, no technical downside is discovered for Bitcoin.
The block-time, that’s the common time to validate a block, has at all times remained round, or under, 10 minutes, with marginal exceptions, and the variety of every day transactions remains to be decidedly excessive.
Certainly, if in March a mean of about 400,000 transactions per day have been recorded on the Bitcoin blockchain, currently, the 600,000 mark has usually been surpassed.
A distinct dialogue, nonetheless, is the one which considerations the worth of BTC.
In actual fact, the extra the revenues of the miners lower, the extra they’re pressured to promote Bitcoin.
Usually, 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 pressured not solely to promote all of the Bitcoin they mine, but in addition a part of these collected beforehand.
The profitability of Bitcoin mining has actually collapsed currently, dropping from $0.12 per day per THash/s in March to the present $0.04. The present degree is even decrease than, for instance, a 12 months in the past, and because of this miners are actually pressured to promote lots of BTC.
The impression on the worth of BTC
All this ensures that the promoting strain of BTC on the crypto market stays vital.
Though general it has decreased, from March till as we speak, it has not decreased as a lot as many had hoped.
In actual fact, the shopping for strain has truly decreased extra, and the inevitable consequence is a discount in worth.
To ensure that this pattern to reverse, it will be crucial 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 could be adequate. As an alternative, a reduce within the issue could be important, with a purpose to considerably scale back the bills of the miners.
Alternatively, the issue is at present near all-time highs, regardless of the halving that occurred a number of months in the past, a lot in order that the block-time stays near 9 minutes. The speculation is even that the subsequent issue adjustment, scheduled for September 11, shall be upward, and if that occurs, the aforementioned downside could be additional exacerbated.
Hashrate and issue ranges
All that is brought on by a curious dynamic, completely surprising.
In actual fact, with the halving of the reward for miners, in concept, they need to have considerably decreased their hashrate. This is able to have inevitably led to a discount within the issue, and due to this fact the prices of mining, thus additionally lowering 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.
Nonetheless, on common it has decreased from 640 to 630, which is a discount too small to deal with the inevitable collapse in revenues because of the halving.
At this level, it will be crucial for the miners to start out shutting down a big variety of previous machines to lower the hashrate, thus additionally decreasing the issue, however whoever does this dangers seeing their revenues collapse additional. So long as the miners don’t capitulate, this example appears destined to persist.