Bitcoin Mining Revenue Falls to Yearly Low Following Halving

Bitcoin mining has recently seen a significant downturn in daily revenue, falling to below $3 million from a previous daily average of roughly $6 million in the early months of 2024.

by Faruk Imamovic
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Bitcoin Mining Revenue Falls to Yearly Low Following Halving
© Getty Images/Mark Case

Bitcoin mining has recently seen a significant downturn in daily revenue, falling to below $3 million from a previous daily average of roughly $6 million in the early months of 2024. This decrease comes in the wake of the fourth Bitcoin halving event that took place on April 20, which saw mining rewards halved from 6.25 BTC to 3.125 BTC per block.

The Impact of the Halving Event

The Bitcoin halving is an integral part of the cryptocurrency's design to limit the total issuance of its capped supply of 21 million coins. This mechanism is intended to reduce the rate at which new bitcoins are generated by making mining rewards less lucrative over time, theoretically increasing scarcity and value.

However, the immediate aftermath of this year's halving has been challenging for miners. While there was an initial surge in mining revenue due to hype around the halving and the launch of the Bitcoin Runes protocol, which temporarily boosted earnings, the start of May marked a stark decline.

On May 1, total revenue from block rewards and transaction fees plummeted to a new low of $26.3 million for the year, contrasting sharply with the all-time high of over $107 million recorded on April 20.

Strategies for Sustaining Profitability

With the stark reduction in earnings, Bitcoin miners around the globe have had to rethink their strategies to remain viable.

As reported by CryptoQuant CEO Ki Young Ju, the price of Bitcoin would need to maintain above $80,000 to keep mining profitable under the current conditions—a figure far beyond its current market value. In response to these challenges, mining operations have begun to invest heavily in upgrading their equipment.

Bitfarms, for instance, has committed $240 million to enhance its mining efficiency. Jeffrey Lucas, CFO of Bitfarms, detailed the firm's strategic overhaul, stating, "The transformational fleet upgrade propels Bitfarms in scale and profitability amid the Bitcoin halving.

This is a game changer that triples our hash rate to 21 EH/s, increases our targeted operating capacity by 83% to 440 megawatts (MW), and improves fleet efficiency by 40% to 21 w/TH." Despite these efforts, Bitfarms reported its lowest monthly earnings of 269 Bitcoin in over two years this past April, underscoring the severe impacts of the halving.

The firm’s proactive steps exemplify the broader industry trend towards technological upgrades aimed at reducing operational costs and maintaining competitive edges in a tighter market. This new normal in Bitcoin mining highlights the delicate balance between technological progress and economic viability as the industry continues to adapt to the diminishing rewards of an aging system.

As miners adjust to these new economic realities, the sustainability of their operations remains closely tied to both market conditions and technological advancements.

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