For the first time in nearly a year, the revenue of bitcoin (BTC) miners exceeded that of Ethereum (ETH) in June. But nonetheless, both the digital assets have shown declining profit margins due to the current crypto winter.
According to a July 5 report from Binance, bitcoin miners made $656.47 million last month.
Meanwhile, Ethereum miners earned $548.58 million in the same period, which is $100 million less than their BTC counterparts. This flip was significant because, in addition to not occurring in almost a year, Ethereum miners were nearly $100 million ahead of Bitcoin miners a month earlier. What’s more, the margin was even higher in the months before May.
Bitcoin Miners Yield More Than Ethereum
Based on the report, there has been a “closing gap” between the two crypto mining revenues over the past few months. Ethereum, which was once a leader in terms of profitability, is barely maintaining its position as BTC miners’ revenue is close to its level. Then came June, where bitcoin mining became more profitable than ether, amidst all the uncertainty and pressure in the crypto market.
But even so, miners of both digital assets have been between a rock and a hard place in recent times. Their yield is directly proportional to the price of the cryptocurrency they mined. This means their earnings have come down significantly due to the current market downturn.
To put this in context, mining a single bitcoin block gives the miner 6.25 BTC. During bitcoin’s all-time high of $69K in November, this was equal to $431,250.
This figure is now down 60% to just $120,000, while BTC is trading around $20K. Miners’ earnings are now at a two-year low since bitcoin traded at this price in December 2020. Ethereum miners suffered similar losses as ETH fell to around $1,100. Binance noted:
“Returns from mining activities, although the same coin volume-wise, have declined significantly, dollar-wise, due to the price drop in the market.”
Due to declining earnings, miners have been forced to either sell their machines and output or look for alternative income sources. Many have sought solace in traditional finance, namely the debt and equity markets.
On top of these issues, miners in Washington have high electricity bills, while in Kazakhstan they are taxed. Those living in New York are now forced to resort to “go green or go home”.
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