Bitcoin miners in crisis? Earnings hit 2021 lows after halving!

Published in: April 30, 2024

• The sustainability of miners’ profits and losses sank to lows not seen since June 2021.
• Due to the drop in profitability, the selling pressure from miners decreased further.

bitcoin [BTC] Miners’ profits have taken a big hit since the halving earlier this month, hurting the industry critical to the smooth functioning of the world’s largest digital asset.

Miners face losses

In an April 29

For those curious, the aforementioned metric measures the growth of block rewards (a critical source of income for miners) against the growth of mining difficulty, which is an indicator of its costs. The sharp drop indicated that miners were “extremely underpaid” at the time of writing.

Furthermore, relative to the price of Bitcoin, miners’ daily income was significantly low, additional data showed.

The recent halving reduced block rewards from 6.25 BTC to 3.125 BTC per block, leading to a situation where miners would have to double their mining investments just to break even.

While big miners with deep pockets might find it easier to weather the storm, small miners would eventually fold.

Sale of pressure drops

Due to falling profitability, most miners have resisted the temptation to sell their Bitcoins and generate cash. According to AMBCrypto analysis of CryptoQuant data, selling pressure from miners has decreased further since the halving.

The reduction in selling pressure was also evident in the lower number of coins transferred to exchanges. Since the halving, the miner’s 7-day moving average for trading flows collapsed to 70%.

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Tariffs don’t come to the rescue.

Miners were also hit by a sharp drop in transaction fees since the halving of the day’s frenzy.

The fee’s percentage of total block rewards progressively fell from 75% on April 20 to 9% on April 29.

This is an automatic translation of our English version.