Bitcoin Miners' Revenue Hits Record as Market Anticipates Upcoming Halving Event
Summary:
Bitcoin's price has consistently been on the rise since January 23, leading to an unprecedented surge in mining revenues. The earnings of Bitcoin miners hit a record high of $78.89 million on March 11, surpassing the previous record set in October 2021. As Bitcoin's price reaches new heights, miner revenues are growing, with more miners joining the network, creating new blocks and confirming transactions, leading to an increase in on-chain activities. In anticipation of the upcoming Bitcoin "halving" event, wherein miner rewards are halved every four years, miners are increasing their operations and preparing for potentially reduced earnings.
Since January 23rd, Bitcoin (BTC) has been on a consistent uptrend, leading to a rise in the earnings of miners that peaked at a record level earlier in the week. Blockchain.com data indicates that the daily Bitcoin mining rewards hit an unprecedented $78.89 million on March 11, exceeding the former peak of $74.4 million recorded in October 2021. The key sources of miner revenues are the rewards for the creation of new blocks and the verification of transactions on the Bitcoin blockchain. Currently, miners gain 6.25 BTC for each successful block they form, aside from transaction fees. Bitcoin reached a new peak of $72,953 on March 12. Even though it later dropped to $69,655, it has still grown by 246% in the past 12 months, based on CoinMarketCap data. The mining sector has likewise see a 212% surge in revenue in U.S. dollars, as displayed in the chart. The revenue from Bitcoin mining rose from $25.23 million on March 17, 2023, to nearly $78.89 million on March 11. Further data from Blockchain.com shows an upward trend in the Bitcoin hash rate over the past year, hitting an all-time high of 676 exahashes per second on February 2. This signifies an increased number of miners are joining to protect the original blockchain network. Bitcoin's hash rate was around 642.9 exahashes per second at the time this news was published. The surge in both Bitcoin miner revenue and hash rate is due to the increase in on-chain activities. The number of transactions on the Bitcoin network hit an all-time high of 974.7 million transactions this week, an increase of 20% from the last 12 months. Increased investment in the U.S. spot Bitcoin ETFs is largely responsible for BTC's price rally, but the impending supply halving event is another crucial matter to follow. Expected to happen in April, roughly 35 days from now, Bitcoin halving is an event that happens every four years and cuts miner rewards by half, reducing their rewards from 6.25 BTC to 3.125 BTC. To cope with this, miners have been capitalizing on the recent BTC surge to purchase more tools to expand their operations and sustain profitability when earnings are reduced, as reported by Bloomberg. Data from TheMinerMag shows that in the past month, major Bitcoin mining corporations have placed orders totalling over $1 billion for mining rigs. Bitfarms is the latest firm to join this trend, purchasing an additional 10 EH/s Bitcoin miners for $143 million. On-chain data from Glassnode shows that Bitcoin miners are cashing in on the recent BTC price rally. The increase in offloading could be due to the anticipation of reduced earnings following the halving, increased mining difficulties, and the hash rate reaching new peaks. As Bitcoin's price skyrockets, so does the revenue of miners, and there's an increasing trend among these market participants to book profits. It should be remembered, however, that investment decisions should be made with careful research as they always carry risk.
Published At
3/12/2024 9:33:19 PM
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