Bitcoin mining companies increased their sales activities. But they still face challenges such as low transaction fees and increasing mining competition. CryptoQuant analysts state that miners will need higher prices to overcome the difficulties.
Bitcoin mining companies increased sales!
cryptokoin.comAs you follow from , there are approximately 15 days left until the fourth Bitcoin halving. Miners are focused on increasing their profitability before block rewards decrease significantly. Some Bitcoin mining companies have increased their sales activities. However, they face challenges such as low transaction fees, increased mining competition, and the need for higher computing power to produce the same amount of BTC.
The reduction of Bitcoin block rewards from 6.25 BTC to 3,125 BTC will significantly impact miners. Miners’ income will decrease by 50%. Therefore, they will need higher BTC prices to maintain their profitability. CryptoQuant’s latest weekly crypto report revealed that the daily revenue of the mining industry will reach record levels in 2024 due to the increase in BTC prices. Revenue currently hovers around $67 million. It reached $79 million in early March. This means a 3.5-fold increase compared to the figures recorded in May 2020, just before the previous halving event.
Bitcoin miners struggle to maintain profitability
Unfortunately, the increase in daily income of BTC miners did not affect the hash price, which was 30% lower than before the last halving. The hashprice, which is the average revenue a miner receives each time they attempt to find a valid block, is currently at $0.11. This income will drop to $0.055 after the halving. In May 2020, this metric was hovering around 0.16 TH/s.
Besides the lower hash price, Bitcoin hashrate increased from 116 EH/s to 600 EH/s. So this means a more than fivefold increase since the previous halving. This shows that miners need more computing power to produce the same amount of BTC per day.
“Higher BTC prices are needed!”
Meanwhile, Bitcoin transaction fees have fallen by 90% from a daily total of 412 BTC in mid-December 2023. Thus, it dropped to 29 BTC at the time of writing. CryptoQuant analysts make the following assessment:
Indeed, transaction fees as a percentage of the total block reward (new Bitcoin issuance + transaction fees) are low. Transaction fees represented ~3% of the total block reward, down from 37% in mid-December 2023. Before the previous halving in May 2020, fees were around 3%. Higher fees or Bitcoin prices are needed to compensate for the loss of block rewards.
These challenges have already affected the daily BTC production of the largest Bitcoin mining firms such as Riot Platforms, Core Scientific, Bitfarms and Marathon Digital. Time will tell what the coming months will bring for them.
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