Bitcoin mining earnings experienced a significant decline in May as the impact of the fourth Bitcoin halving event began to take effect.
The Bitcoin halving mechanism was designed to gradually reduce the issuance of Bitcoin over time, with a total limit of 21 million BTC. The halving that occurred on April 20 decreased mining rewards from 6.25 BTC to 3.125 BTC.
Initially, there was a lot of excitement surrounding the halving and the launch of Bitcoin Runes, which temporarily sustained miners’ daily earnings. However, in May, a sharp decline in revenue was observed. On May 1, the total revenue earned from block rewards and transaction fees hit a new low of $26.3 million.
Before the halving, data from Blockchain.com shows that Bitcoin miners were earning an average of $6 million per day. However, the situation has changed dramatically since then.
The revenue patterns in May continued to reflect this downward trend, indicating a new normal in Bitcoin mining revenue. Interestingly, mining revenue reached its peak on April 20, reaching an all-time high daily earnings of over $107 million, a first in Bitcoin history.
In anticipation of this significant drop, miners around the world have been reevaluating their operations to ensure profitability in the next phase of the Bitcoin economy. Otherwise, they would have to solely rely on the high market value of Bitcoin to sustain their operations.
According to CryptoQuant CEO Ki Young Ju, Bitcoin would need to maintain a value above $80,000 in order for mining to remain profitable under current conditions. However, most miners have taken proactive measures to upgrade their mining equipment and reduce long-term operational costs to stay competitive.
For instance, Bitcoin mining firm Bitfarms has allocated $240 million to triple its hash rate. In a previous interview with Cointelegraph, Bitfarms’ chief financial officer Jeffrey Lucas explained the company’s commitment to acquiring 88,000 highly efficient Bitcoin miners.
Despite their efforts, Bitfarms experienced its lowest monthly earnings in over two years in April, with only 269 Bitcoin mined.
In conclusion, the effects of the Bitcoin halving event have significantly impacted mining earnings, leading miners to adapt their strategies and upgrade their equipment to remain profitable in the evolving Bitcoin economy.