Crisis for Already Struggling Bitcoin Miners: Earnings Fall 15% in 7 Days
Data shows that the already struggling Bitcoin miners have been dealt another blow this week as their earnings have dropped by 15%.
Bitcoin Daily Miner Earnings Dropped Sharply After Price Crash
According to data from the latest weekly Arcane Research report, daily mining revenue has dropped to just $16.3 million now.
The “daily miner earnings” are calculated by multiplying the total amount of Bitcoin that miners receive in block rewards and transaction fees each day, by the current price of the crypto.
Since the block rewards are mostly fixed, earnings mainly depend on the price and transaction fees.
However, fees have been at a very low level on the BTC network for some time now, making up a fairly small percentage of the total mining revenue.
So in practice, miners only depend on the BTC price for their earnings. Here’s a table showing how the miner-related metrics have changed recently:
Looks like the average transaction value has shot up by more than 68% during the period | Source: Arcane Research's Ahead of the Curve - November 15
As you can see above, in the 7 days following the crash caused by the FTX collapse, Bitcoin’s daily miner earnings fell by around 14.7%, reaching a value of just $16.3 million.
During this period, fees per day actually increased by 2.2%, reaching a value of $348.5k. However, since this value is only 2.1% of total revenue, this increase is unlikely to affect the drop in revenue caused by the price crash.
Many miners had already been under extreme pressure before this latest crash even came, due to a variety of reasons.
The main factors have been the bear market and rising energy prices. This bear has been long and has brought with it a deep decline in prices, which has resulted in miner earnings falling to very low values.
Electricity costs are basically the only operating expenses that miners face, and their profits therefore depend on them.
But as energy prices have soared around the world this year, they have severely cut into miners’ profits, even making mining unviable for some miners altogether.
The latest plunge in mining revenue is sure to be the final blow for many of these struggling miners, and it’s no wonder these chain validators have been dumping their coins hard for the past week.
At the time of writing, Bitcoin is trading around $16.5k, down 5% in the last week.
BTC continues to display flat price action | Source: BTCUSD on TradingView
Featured image from mana5280 on Unsplash.com, charts from TradingView.com, Arcane Research