Bitcoin miner revenue has plummeted since the bitcoin price peaked in November. This put miners in an awkward position, causing a large number of them to sell their bitcoin holdings in order to continue to fund their operations. The same was the case for last week, where mining returns were once again in the red. However, as the tide begins to turn in the crypto market, there may be light at the end of the tunnel for miners.
Mining revenue down 4%.
Over the past month, miners’ daily revenue has trended in excess of $18 million, but it has continued to post losses with each passing week. Last week put an end to this trend when mining revenue fell again, this time by 4.03%, causing average daily revenue to drop below $18 million. Reports show that miners saw an average of $17.7 million in revenue, down more than 60% from their peak in November.
What followed was a sell-off from bitcoin miners across the space. With profitability dropping, miners have had to offload more BTC to provide cash flow for their operations. In June alone, miners sold 25% of their holdings, and with prices staying low, July reports are expected to show higher sales for July.
Over the past two months, bitcoin miners have been selling more bitcoin than they were producing. For the month of May, they sold over 100% of the BTC produced. This number jumped by 400% in June when public miners sold nearly 14,600 BTC when they had only produced a total of 3,900 BTC, representing 25% of all holdings.
BTC drops to $22,700 | Source: BTCUSD on TradingView.com
Surprisingly, daily fees rose 12.61% last week, bringing the percentage of revenue collected from fees to 2.59%, up 0.38% from the previous week.
Will the Bitcoin Rally help?
The recent rally in the market has seen the price of Bitcoin recover key technical levels and reach one-month highs. The digital asset even briefly touched over $24,000 before heading lower again, and the first half of the week was green for the digital asset.
Related reading | Why Bitcoin must surpass $25,500 to establish a bullish rally
Since the profitability of bitcoin mining is directly related to the price of the digital asset, it is safe to assume that there may be some upside in mining revenue for this week. Given that the price has been heading towards $19,000 for most of the past week, a hike of over $22,000 will make public bitcoin miners generate more revenue from their mining operations.
However, since the price did not recover by a wide margin, the increase in daily mining revenue is expected to remain below double digits. It is also important to note that there is more demand for block space, which leads to higher transaction fees on the network, which contributes more to the daily revenue from miners.
Featured image from GoBankingRates, chart from TradingView.com
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