Bitcoin miners have been hit hard after the digital asset’s price crash. After what is called an amazing run towards the end of 2021, miners have now hit a tough patch where their revenue is falling. Last week will be no different, indicating a continuation of low cash flow on the part of miners, as daily miner revenue remains depressed in the first week of June.
Bitcoin Miners Take a Hit
Bitcoin miners haven’t had the best few months now. With the fall in the price of bitcoin, the revenue of the miners declined. This saw their daily figures drop to $26 million last week and daily miner revenue to $27.19 million, up 1.47% from the previous week. When the price of the digital asset hit its all-time high, it was a far cry from what miners were earning.
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At the beginning of November 2021, when bitcoin traded as high as $69,000, daily miners had a cumulative $62 million in revenue. This means that daily miner revenue has dropped by more than 50% in the past six months alone. This decline in profitability has prompted some miners to sell their stake to finance their operations.
The percentage of miners’ revenue made up of fees remains at an average of 1.67%. There was no increase in this metric since last week, although most had turned green. Transactions per day increased by 0.23% but remained low.
BTC down more than 50% from ATH | Source: BTCUSD on TradingView.com
However, the daily trading volume has increased over the past week. A 9.92% increase in transaction volume increased from $4.595 billion in the previous week to $5.051 billion recorded last week, emerging as the metric with the highest increase in the past seven days.
hashrate takes a noose
The bitcoin hashrate has been following the path of daily miners’ revenue as it too was on a decline recently. The decline in mining revenue has been the biggest factor in this decline in hash rate. While some miners have been able to sell off shares or their BTC holdings to finance their mining operations, others have found themselves unable to keep up. As such, he had to unplug his rig and exit the market.
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This has resulted in a 10% drop in the bitcoin hashrate in the past month. This has affected block production as the number of blocks per hour now sits at 5.85 blocks per hour, down 1.11% from the previous week. However, the average transaction per block has registered an increase of 0.23% in the last 7 days.
BTC hashrate drops 10% | Source: Arcane Research
More miners with higher production costs are expected to close operations with no improvement in daily miner revenue. With the 6.25 BTC reward mined per block and the low prices, many miners are likely to suffer losses.
Mining difficulty is expected to decrease on Wednesday, with hopes that the hash rate will improve.
Featured image from Coingape, charts from Arcane Research and TradingView.com
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