With bitcoin’s price declining 5% over the past week, miners have been experiencing reduced revenue as the hashprice has dropped to a level not seen since May. Currently, the hashprice, which is the estimated daily value of 1 petahash per second (PH/s), is below and hovering just above per PH/s. Declining Bitcoin Value […]
Bitcoin News
Bitcoin Miners Near Final Month Before Reward Halving Slashes Revenues
There are 34 days left until the Bitcoin network’s halving event, expected on or around April 20, 2024, which will reduce miners’ rewards by half. Bitcoin’s price has remained above ,000 throughout March, reaching close to ,000 on March 14. Between onchain fees and the price increase, these factors could offset revenue losses from the […]
Bitcoin News
Heightened Bitcoin Fees and Erratic Mining Revenues Herald Murky Shift as Halving Nears
Recent statistics reveal that for the past 75 days, starting from Nov. 6, 2023, the average transaction fee on the Bitcoin network has consistently stayed over . Additionally, since Dec. 4, 2023, these fees have predominantly been over , with a single exception occurring when it briefly fell to .33 per transaction.
Bitcoin Miners Face Complex Dynamics in 2024 Ahead of Halving Event
In 2024, the cost of the average onchain transaction fees has surged compared to the previous year. Over the last 46 days, these fees have consistently exceeded per transaction, with the sole exception being Jan. 13, 2024, when they momentarily dipped to .33. Throughout January this year, miners have amassed over 0 million in a combination of new BTC and transaction fees.
Over the last 46 days, median transaction fees on the Bitcoin network have consistently stayed above . Despite January showing stronger performance compared to most months in 2023, the recent decline in bitcoin’s value has impacted miner revenues. This downturn follows the mass approval of 11 spot bitcoin exchange-traded funds, leading to a bearish trend in BTC’s spot market behavior.
For instance, around Dec. 20, 2023, the daily value of one petahash per second (PH/s) of hashpower was nearly 0. By Jan. 19, 2024, this value had decreased by 34.59%, dropping to .48 per PH/s per day. Bitcoin miners also curtailed the hashrate this month leading to a significant drop in overall hashpower. The situation has been influenced by an increase in block time intervals between the previous difficulty adjustment and the upcoming retarget.
As a result, bitcoin miners might receive some relief on Saturday during the retarget epoch, with current estimates suggesting a potential decrease in mining difficulty. It’s projected that there could be a 4.4% reduction in difficulty, which may ease some of the pressure. However, the declining price of bitcoin continues to erode revenues. Additionally, miners are facing the challenge of processing a backlog exceeding 250,000 unconfirmed transactions.
Amid heightened transaction fees and fluctuating mining income, the impending halving looms as a critical juncture for the industry, with fewer than 14,000 blocks remaining. The recent downturn in price and the forecasted difficulty recalibration might herald a small change in mining operations, with market stability possibly affecting future earnings and the stability of the network. As miners tackle these challenges, their actions could create a benchmark, steering the course of the leading crypto asset’s economic environment in the coming months.
What do you think about the fluctuations and challenges bitcoin miners face before the upcoming halving? Share your thoughts and opinions about this subject in the comments section below.
Study: Less Than 5% of South Africa-Based Crypto Asset Providers Generate Revenues Exceeding $8 Million
Only five percent of surveyed South African crypto-asset financial service providers (FSPs) are generating revenue between million and million. The Financial Sector Conduct Authority study found that many of the crypto asset FSPs “earn their revenue from trading fees.”
Only 10% of FSPs Derive Income From Both Regulated and Unregulated Financial Services
According to findings of a crypto market study conducted by the South African financial services industry watchdog, approximately 46% of the crypto asset financial service providers generated revenues equivalent to between ,000 and .68 million. On the other hand, 38% of the crypto asset FSPs said they received revenue of less than ,000. Only five percent are generating revenue between million and million.
The data shows that only five per cent of the FSPs generate revenues between million and million. Out of all the FSPs that responded substantively to the regulator’s information request, 10% derived their income from “both regulated and unregulated financial services.”
As noted by the Financial Sector Conduct Authority (FSCA), some 47 crypto asset FSPs participated in the crypto market study. Explaining the rationale behind its decision to conduct the study, the FSCA said the information gathered is expected to support its work by “highlighting consumer exposure to crypto assets.” The information may also help the authority “identify risks that may negatively impact consumer well-being.”
Meanwhile, 49% of the surveyed crypto-asset financial service providers (FSPs) said they run a crypto exchange. Some 19% of the respondents offer advisory services relating to crypto assets, while 15% identified themselves as crypto brokers. Only 2% said they offer custodial services.
93 License Applications Received
The FSCA study also found that most of the crypto asset FSPs “earn their revenue from trading fees” while their remuneration models are largely identical to traditional financial revenue models.
During a Nov. 30 media briefing, the FSCA said it had received 93 license applications from current FSPs and “completely” new applicants. However, according to the FSCA’s Diketso Mashigo, some applicants eventually decided against seeking a South African license.
“Some decided to take their business out of the country and conduct their services elsewhere in other foreign jurisdictions.”
Mashigo also revealed that some applicants submitted their license applications just days before the November 30 deadline.
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‘Stagnant’ BTC Price and Rate Hikes Drove Down Crypto Miner Canaan Inc’s Revenues in Q3
Canaan Inc, the crypto miner and mining rig producer, said the company’s overall revenue in Q3 stood at .3 million or some million lower than the Q2 revenue. According to the company’s CEO, stagnant bitcoin prices and rate hikes by the U.S. Federal Reserve were some of the key factors that contributed to the decline in revenues.
Canaan’s Latest Mining Revenue Nearly 80% Lower Than in Q2
In the third quarter (Q3) of 2023, the overall revenue of Canaan Inc, the crypto miner and mining rig producer, stood at .3 million or just over million lower than the .9 million realized in Q2, the firm’s latest financial results have shown. The firm’s Q3 revenues are also significantly lower than the 5.5 million generated during the same period in 2022.
As shown in the company’s unaudited Q3 financial results, Canaan Inc revenues earned from mining activities were nearly 80% (.3 million) lower than Q2 revenues of .9 million. Similarly, Canaan’s 2023 Q3 mining revenues are almost 65% lower than the .2 million that was generated in Q3 of 2022.
Increased Price Competition
Commenting on the company’s performance in the quarter under review, Nangeng Zhang, the chairman and CEO of Canaan, said:
During the third quarter of 2023, the stagnant bitcoin price and further interest rate hikes by the Federal Reserve presented us with significant challenges. Despite these headwinds, we have stayed committed to our strategic plan. In mid-September, we launched and opened pre-sales for our new A14 product series, featuring computing power of 150Thash/s with superior energy efficiency of 21J/Thash/s.
Zhang also identified increased price competition and “a noticeable softening in purchasing power on the demand front” as factors that contributed to the drop in revenues. As a consequence, Canaan went on to record a loss from operations of 2.8 million. The loss is .3 million lower than that realized in Q2 of 2023.
Meanwhile, in its Nov. 28 press release, Canaan revealed it had been granted a “Type II license for mining hardware owners to conduct bitcoin mining in Kazakhstan.” Concerning a dispute with its U.S. mining partner, Canaan said its subsidiary had filed an arbitration demand on October 19, 2023. In addition, the subsidiary had taken “possession of approximately all 26,000 units of mining machines deployed in this project.”
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Bitcoin Transaction Fees Dip Amid November’s Surging Miner Revenues
Transaction fees for Bitcoin have eased, following their surge to more than per transaction on two separate occasions last week. As of November 24, 2023, the average fee per transaction stood at roughly .89, with the median fee per transfer being .86.
Bitcoin Fees Cool Down — November’s Mining Revenue Has Already Outstripped October’s
After reaching a peak of over per transfer on November 16 and 18, 2023, the expense for block space has seen a decline. Data from November 24 shows the average cost per transaction hovered at about .89.
This represents a significant decrease from the previous day’s average of .06 per transfer, underscoring the fluctuating nature of block space costs over the past week.
Data from Dune Analytics reveals that Ordinal inscriptions continue to flourish, with over 300,000 mints daily following a peak of more than 475,000 inscriptions on November 19. On November 24, a total of 347,791 inscriptions were minted, and as of November 25, bitcoin miners have already processed upwards of 289,000 inscriptions.
This surge in inscriptions, combined with the volume of financial transactions, has resulted in the mempool being filled with over 200,000 transfers.
As of 4:00 p.m. Eastern Time (ET) on November 25, there are 206,697 unconfirmed transactions, which translates to a backlog of approximately 269 blocks worth of space, as per mempool.space.
Fee metrics from mempool.space on the same day, measured in satoshis per virtual byte (sat/vB), indicates that a “no priority” transaction currently costs an estimated .17 or 22 sat/vB.
In contrast, a “high priority” transaction is priced at 45 sat/vB, amounting to .38 per transaction. Additionally, data suggests that November’s BTC mining revenue is already outstripping last month’s figures, even before the month concludes.
In October, miners earned 5 million in rewards and fees. As of November 25, 2023, miners have earned 5 million in total, including transaction fees and the subsidy.
At 4:00 p.m. (ET) on Saturday, miners have accumulated 4.98 million from fees alone, excluding the subsidy. This figure is nearing the 2023 record of 5.92 million in fee revenue, set in May.
Given the current trajectory and if transaction fees remain high and volatile, it appears likely that miners could surpass this record within the next five days.
What do you think about the network transaction fees’ dynamics? Share your thoughts and opinions about this subject in the comments section below.
Ethereum Network Accounted for Over 90% of Layer 1 Revenues in Q3 — Study
According to a Messari report, the Ethereum network’s revenues constituted more than 90% of the 1.5 million generated by layer 1 chains in Q3. The data also shows that in the period in question, the Aptos network’s revenues were 160% higher than in the preceding quarter.
Ethereum Still Dominates
While the third quarter (Q3) revenue of the Ethereum network fell by 47.3% quarter-on-quarter (QoQ), it still accounted for nearly 91% of the total revenues generated by layer 1 (L1) protocols, data from the latest Messari study has shown. The data also shows the Avalanche (58.1%) and Polygon (55.6%) networks as the only other L1s which had steeper revenue drops than the Ethereum network.
According to the Messari report, the total revenues generated by the 17 L1s that were examined were 46.7% lower or 1.5 million less. During the same period, the market capitalization of all the L1s also dropped by 9.8% to close the quarter at 2.6 billion. The Ethereum network’s dominance in the period was largely unchanged, the report added.
However, as shown by the data, the Aptos and NEAR networks had better fortunes in the quarter than the other L1s. For instance, the data shows that in the period in question, the Aptos network’s revenues were 160% higher than in the preceding quarter. This spike in revenues is attributed to the protocol’s integration of the social media platform Chingari in early July.
On the other hand, the launch of the artificial intelligence (AI)-based lock screen platform Kaikainow is said to have fueled NEAR network’s “second highest revenue growth rate at
56%.”
Solana Has Most Average Daily Transactions
In terms of the number of average daily transactions (ADT), Solana had the most with 24.7 million followed by WAX with 17 million. The BNB Chain took the third spot with 3.5 million ADT while Polygon’s 2.3 million was enough for it to occupy the fourth spot. Despite accounting for a large chunk of the revenues, the Ethereum network’s transaction throughput of one million per day was only enough for the fifth position.
As shown by the data, SKALE saw the largest (241%) growth in the number of transactions in the period while NEAR had the biggest daily active address increase of 346%.
With respect to the total value locked (TVL) in decentralized finance, the data shows that this fell by 16.4% to .9 billion. From this total, the Ethereum network accounted for 82.4%.
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Bitcoin Miner Revenues Continue To Grow, Will This Put A Stop To The Sell-Offs?
Bitcoin miner revenues have been a hot topic of discussion in the last three months. It mainly follows the decline in cash flow of mining machines due to the drop in the price of BTC, and that has adversely affected the revenues of bitcoin miners, seeing them drop to yearly lows. However, as the market has recovered some of its lost value, bitcoin miners are starting to fare better in terms of revenues, which could be the plug to the recent sell-offs.
Miner Revenues Grow
Bitcoin daily miner revenues had dropped to the million level during the lowest point. At this time, bitcoin miner revenues were dropping in double-digit percentages following the plunge in BTC’s price. It would, in turn, trigger massive sell-offs from miners as they scrambled to keep their operations going.
The miner revenues are now rebounding following the price increase. Last week, the price of BTC had grown to more than ,000, and this increase is being reflected in miner revenues. According to data from Arcane Research, daily miner revenues had jumped 5.32% from the previous week’s .4 million to last week’s .55 million. This reversal in the declining trend has once more helped miners to become more gas flow positive, albeit by a small margin.
However, the daily miner revenue would be one of the only few bitcoin metrics to be green for last week. The percentage of miner revenues made up by fees declined significantly, falling 0.68%, as fees per day declined 28.12% to 7,246 from the prior week’s 1,342.
BTC retakes ,000 | Source: BTCUSD on TradingView.com
The daily transaction volumes were also down, which explains the drop in fees realized per day. Transaction volume was down 14.38% for the week, while average transaction value was down 15.66% to come out at 4,429.
Will Bitcoin Miners Stop Selling?
Bitcoin miners have had to offload thousands of their mined BTC to fund their operations. The months of April and June had seen bitcoin miners selling off more BTC than they had produced for the month for the first time ever. It marked the beginning of the sell-off trend for these bitcoin miners.
By now, bitcoin miners have sold more than 4,000 BTC due to declining profitability. However, with the rebound in miner revenue, it is possible that there may be a slowdown in the sell-offs, particularly for public miners.
One of the reasons that could put a stop to it is the increase in the value of mining stocks as BTC grows. An example is the Marathon Digital stock which is up more than 28% from its last week’s low. MARA is currently trading at .96 after hitting a low of .08 last week.
Featured image from Bitcoinist, chart from TradingView.com
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Bitcoin Miner Revenues Continue To Plunge, But Will The Rally Change This?
Bitcoin miner revenues have been plummeting ever since the price of BTC peaked back in November. This has put miners in a tight spot, causing a good number of them to sell their BTC holdings in order to keep financing their operations. The same was the case for last week, where miner revenues were once again in the red. However, as the tide begins to change in the crypto market, there may be light at the end of the tunnel for miners.
Miner Revenues Down 4%
For the past month, daily miner revenues have been trending above million but continued recording losses with each passing week. Last week would put an end to this trend when miner revenue fell once again, this time by 4.03%, causing average daily revenues to drop below million. Reports show that miners saw an average of .7 million in revenues, more than 60% down from its peak back in November.
Related Reading | Ethereum Classic (ETC) Reclaims Billion Market Cap, More Upside To Follow?
What followed this was a sell-off from bitcoin miners across the space. As the profitability plummeted, more BTC had to be offloaded by miners to provide cash flow for their operations. In June alone, miners had sold off 25% of their holdings, and with the prices remaining low, reports for July are expected to show even higher sales for the month of July.
For the last two months, bitcoin miners have been selling more BTC than they were producing. For the month of May, they had sold more than 100% of the BTC produced. This number had jumped 400% in June when public miners sold approximately 14,600 BTC when they had only produced a total of 3,900 BTC, accounting for 25% of all of their holdings.
BTC drops to ,700 | Source: BTCUSD on TradingView.com
Surprisingly, fees per day were up 12.61% last week, which brought the percentage of revenue gotten from fees to 2.59%, a 0.38% increase from the prior week.
Will The Bitcoin Rally Help?
The recent rally in the market has seen the price of bitcoin reclaim key technical levels and reach one-month highs. The digital asset had even briefly touched above ,000 before trending back down, and the first half of the week had been green for the digital asset.
Related Reading | Why Bitcoin Must Beat ,500 To Establish A Bull Rally
Since the profitability of bitcoin mining is directly tied to the price of the digital asset, it is safe to assume that there may be some uptick in miner revenues for this week. Given that price was trending around ,000 for most of last week, an increase above ,000 will see public bitcoin miners realize more revenue from their mining operations.
However, given that the price had not recovered by a wide margin, the rise in daily miner revenue is expected to remain under double-digits. It is also important to note that there is more demand for block space, leading to higher transaction fees on the network, contributing more to the daily miner revenues.
Featured image from GoBankingRates, chart from TradingView.com
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Decline In Bitcoin Miner Revenues Suggests More Sell-Offs May Follow
Bitcoin miner revenues have been in decline since the bear trend began and this has led a good number of miners to sell their BTC holdings in order to keep their operations afloat. However, the expectation that the bear market would soon resolve and miners would once again be in the green has since gone out the window. With miner revenues continuing to plummet, miners may have to resume selling off their holdings to keep up with the market.
Miner Revenues Fall
For the past week, there has been no change in the downtrend in miner revenues. On-chain metrics show that it was down 0.59% from the prior seven days bringing the total daily miner revenues to .62 million. Mostly, it has remained flat during this time and other metrics have dived further into the red during this time.
Related Reading | Institutional Investors Remain Bearish As Short Bitcoin Sees Record Inflows
An example is the fees per day culled by miners. It was down 10.55% in the same time period, one of the highest declines recorded in this time period. With fees per day being so low, the percentage of the daily miner revenues which it makes up is also down, now sitting at 1.50%.
Additionally, the daily transaction volumes are also down, which explains the decline in fees per day realized. This was down 9.75%, although transactions per day had seen some growth. It rose 1.96% in the same time period and is now at 248,071 per day.
Average transaction volume has also followed the decline in network activity with an 11.46% decline. This now stands at ,333.
Bitcoin Miners Selling Bitcoin?
Over the course of the last several months, miners have seen their cash flow plummet. These miners still have outstanding debts from machine orders that they had made during the bull market of 2021 but have not been profitable enough to keep their mining activities going. What had resulted from this was a sell-off among bitcoin miners.
Most prominent of these have been the sell-offs from top public bitcoin miners such as Marathon Digital and Riot Blockchain. In June, it was reported that these public miners had had to sell off more BTC than they had produced in the space of a month.
BTC close to test ,000 | Source: BTCUSD on TradingView.com
Most recently, the news of another bitcoin miner dumping its holdings emerged. This time around, Core Scientific had announced that it had sold the majority of its BTC in a monthly update post. It realized a total of 7 million from the sale of 7,202 BTC. Following this, the miner’s bitcoin holdings now sit at 1,959 BTC.
Related Reading | SEC Still Against Spot-based Bitcoin ETFs. Is There A Light At The End Of The Tunnel?
This trend was expected as soon as the price had begun to drop. However, with no recovery in sight, it is expected that more miners will come forward to sell their BTC. What’s more, these are reports from public miners and there’s no way to tell how much BTC private miners have had to dump.
Featured image from BBC, charts from TradingView.com
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