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Bitcoin miners face financial difficulties
Bitcoin miners are starting to feel squeezed as halving rewards become their new reality post-halving.
An increase in network tariffs briefly eased their tension. However, declining transaction fees are now increasing financial pressure.
Post-halving pressures mount for Bitcoin miners amid declining fees
Kaiko Research recently reported an increase in average daily network rates after the halving. This surge has helped Bitcoin miners offset some disruption, albeit temporarily.
However, the initial user the rush towards the Runes protocol has cooled. Second Dune Analysis, rune transactions collapsed by over 4,500%. They dropped from 753,814 on April 24 to 16,630 on May 14.
Furthermore, Halving events often force miners to sell BTC to cover the costs of creating new blocks. While the surge in commissions has helped alleviate some selling pressure, the recent decline in commissions could renew pressure.
To know more: How Much Electricity Does Bitcoin Mining Use?
“For example, Marathon Digital holds 17,631 BTC is worth just over $1.1 billion, while Riot Platforms holds another 8,872 BTC worth over $500 million. If miners were forced to sell even a fraction of their holdings in the next month, it would have a negative impact on markets,” the report reads. law.
Bitcoin miners reward after 2024 halving. Source: Kaiko research
Additionally, trading activity and liquidity typically decline during the summer. Last August, the 2% market depth fell to $250 million. This seasonal decline could further complicate the situation for miners and the cryptocurrency market in general.
Crypto analyst Maartun echoed Kaiko Research’s finding. He noted that Bitcoin miners’ profitability has fallen to a 3-year low.
“Bitcoin miners are facing significant underpayments due to the recent halving of block subsidies and relatively low transaction fees. This will likely cause significant strains, especially for less efficient miners,” he said he wrote.
Despite the current situation, crypto analyst PlanB sees a brighter long-term future. PlanB said it Bitcoin miners revenue will recover in 2 to 5 months as the price of Bitcoin (BTC) will double.
“[In] 2012: Revenues decline [from] $3 million [to] $1.5 million, in 2 months. [In] 2016: [revenue] drops [from] $60 million [to] $30 million, in 4 months. [In] 2020: [revenue] drops [from] $500 million [to] $250 million, in 5 months,” PlanB explained.
To know more: An introduction to free Bitcoin mining
AS Bitcoin Miners Weather the Post-Halving Storm, their financial resilience is put to the test. Fluctuating rates and market conditions pose challenges and opportunities. With the expected recovery of mining revenues, the coming months will be crucial for the stability and growth of the sector.
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