Ethereum has continued to gain a fair share of dominance among altcoins. The same goes for miners. Ether miners made more than $3 billion in 2021 compared to their bitcoin counterparts. However, this year the positive narrative of ETH miners got a major setback.
Well, the first thing is the much awaited merge. The merger would force Ethereum’s $19 billion mining industry to find a new home. This will move Ethereum’s consensus mechanism from proof-of-work to proof-of-stake.
Another reason is the ongoing crypto reform. Ethereum has decreased in value by 72%, which means that the miners’ revenue must have dropped significantly. Glassnode, a blockchain analytics firm, showed miner revenues fell to dangerously low levels.
Ethereum miners lost 27% in revenue since April. Notably, Ethereum mining generated total revenue of $1.39 billion in April 2022. Ethereum mining also saw a year-on-year monthly decline in May. Well, revenue of about $2.4 billion was generated in May 2021, while the figure for 2022 declined by 57%.
Overall, the declining ETH price and the impending merger forced some miners to disconnect their rigs. ETH’s network difficulty declines paint Or rather, shed light on this fall. This processing power suffered a drop of over 10% as the value of mining proceeds fell due to the price of ETH which has been in freefall recently.
On the year-to-date chart, miner activity dropped to around 900 TH/s this June after peaking above 1,000 TH/s.
In addition, the ever-increasing electricity prices around the world made it worse. Electricity bills typically account for a large portion of the day-to-day costs of miners, and an increase in electricity prices will result in less net profit for them.
Naturally, the drop in the Ethereum hash rate and other factors affected the profit margins of the miners. Ergo, he disconnected his GPU (Graphics Processing Unit).
Data from tech outlet Toms Hardware reported that graphics card prices continued to fall in June as they posted a 14% drop.