Key Takeaways
- The decline in both mined coins and revenue can be linked to the rising difficulty of mining Bitcoin
- The median fees, which contribute to a block reward, made up just 2% in August
Bitcoin miners had their lowest revenue month in nearly a year this August, bringing in just $827.56 million. This marked a significant drop of over 10.5% from the $927.35 million generated in July, as reported by Bitbo data. While this is a decrease, it’s still a 5% increase from August 2023 figures.
August’s earnings are a far cry from the peak seen in March 2024 when miners made nearly $1.93 billion, coinciding with Bitcoin hitting its record high of more than $73,500. The revenue dip comes as the number of mined Bitcoins also fell, from around 14,725 BTC in July to 13,843 BTC in August.
The decline in both mined coins and revenue can be linked to the rising difficulty of mining Bitcoin. The difficulty level reached a new high of 89.47 trillion in August, up from 86.87 trillion in July. This increase means that mining new Bitcoins requires more computational power and energy, which is straining the profitability of mining operations.
Miners are feeling the pinch from several angles. The cost of mining equipment, rising electricity prices, and Bitcoin’s market value all play a role in determining profitability. The April Bitcoin halving, which cut block rewards by half to 3.125 BTC, has further tightened the squeeze on miners. While Bitcoin’s price has surged, now trading at around $57,315, this increase hasn’t entirely offset the reduced mining rewards.
High energy consumption is another pressing issue for miners. Bitcoin mining consumes around 176 terawatt-hours of electricity annually, according to the Cambridge Bitcoin Electricity Consumption Index, exceeding the energy use of many nations. Areas with lower electricity costs offer a competitive advantage for mining operations.
Decreasing transaction volumes have also impacted miners’ earnings. The median fees, which contribute to a block reward, made up just 2% in August. On July 31, the 30-day average of daily confirmed transactions reached a year-to-date high of nearly 631,648 before dropping to 594,871 by August 31.
