Financial Squeeze Tightens For Bitcoin Miners Amidst Falling Earnings

Financial Squeeze Tightens For Bitcoin Miners Amidst Falling Earnings

On Friday, the hash price of Bitcoin had stood at $56.95 per petahash per second (PH/s), but it had dropped to $51.66 PH/s by Sunday.

In the last 100 blocks, bitcoin miners had earned about 3.55 BTC for every block that was mined, which showed that they were receiving on chain fees of less than half a BTC per block.

The halving impact

After the halving event, it was understood that Bitcoin miners would earn significantly less BTC for every block they mine and it has now materialized.

In addition, Bitcoin miners had also been enjoying high fees before mining block 840,000, but now those have also been wiped out.

The initial high fees may have provided some Bitcoin miners the financial buffer they need to withstand the current decline in revenue.

However, there might be tougher challenges ahead for miners who were unable to enjoy the benefits of these high fees.

As of April 28, the hash price of Bitcoin stood at approximately $51.66 per petahash. Miners had been earning more than $100 per petahash daily before the halving event occurred.

No matter what perspective you use to look at it, the fact is that miners have seen a significant decline in revenue, similar to a 50% price drop in a clearance sale.

The breakdown

A strong hash rate has been maintained, thanks to the buffer that miners gained before the halving event, but there has been a slight decrease in the hash rate.

Nonetheless, it is still above the 630 exahash per second (EH/s) mark. Data showed that an average reward of 3.88 BTC was generated per block from block 840,840 to 840,949.

However, this number declined in subsequent blocks. An average of 3.56 BTC was earned on April 27th between blocks 841,057 and 841,157. This includes the fees as well as newly minted coins.

Miners were able to earn an average of 3.55 BTC between blocks 841,125 to 841,225.

The revenue

As far as the financial runway is concerned, BTC miners were able to reach a record in March, as they managed to generate revenue of about $2 billion, and on chain fees stood at around $85 million.

The figures recorded in April were also quite strong, as the revenues stood at about $1.67 billion, while the on chain fees were around $269 million.

With the price of Bitcoin currently above the $60,000 mark, but potentially declining, there might be increasing financial pressures on miners.

If the price of the leading crypto in the market falls below the $55,000 mark, then it could further reduce its revenue in a market that is already fragile.

It should be noted that after the halving event, miners have already seen their rewards cut in half from 6.25 BTC to 3.125 BTC.

With declining revenues, it is likely that some Bitcoin miners may be forced to shut down their operations, something that had already been predicted before the halving event.

If the price of Bitcoin continues to reduce, things are going to turn dire for many Bitcoin miners.