Bitcoin Mining Revenue Returns to Pre-Halving Levels & Records Yearly High
Major on-chain measures such as Bitcoin (BTC) mining revenues are back to pre-halving stages, as per latest study. Specifically, data provided by analytics provider Glassnode indicates that Bitcoin mining revenues have attained the levels it was when block rewards were twice the current level.
Back in mid-May, when halving event happened, Bitcoin was trading at roughly $9,000. From that level, it has doubled to $18,000 on November 18.
This indicates a correlation as miners have to sell off at least a portion of their rewards to manage their operating costs in order to remain profitable. Higher Bitcoin prices imply a surge in profits.
Blockchain.com, which monitors the aggregate value of coin-based block rewards and transaction charges paid to miners affirmed the outcome.
#Bitcoin miner revenue is back at pre-halving levels.
— glassnode (@glassnode) November 18, 2020
The daily revenue numbers, which encompasses block rewards and transaction charges, was $21.20 million for November 18, the highest in a year. The earlier high was on May 6, which it hit $20.60 million. After the halving event, which brought down block rewards from 12.50 BTC to 6.25 BTC, revenue plunged to a mere $7 million per day.
Back in March 18, mining revenue plunged following the pandemic triggered crypto market crash, which erased 45% off the price of Bitcoin within a week. When mining revenue declines steeply, overleveraged miners can start capitalizing due to adverse market environment.
The reverse is seen to take place at the instance prices reach their all-time peak. Hash rate, which is only 10% below the all-time peak, is another criteria demonstrating that the network is healthy and miners are happy.
As the rainy season ended in China, where a major portion of Bitcoin mining happens, rigs were switched off in an attempt to relocate as cost free hydroelectric power fades away. This has resulted in a seasonal hash rate decline of 37% to lower than 98 exa-hashes per second.
From then onwards, hash rate, which several people trust to be linked to price, has rebounded to 143.40 EH/s, which is near to mid-October high of 157.60 EH/s, as per Bitinfocharts.com.
The prevailing mining revenue numbers and hash-rate recovery is a positive sign for the extension of the bull market, which may lift Bitcoin to a new historical high by the end of 2020.