Earnings from Bitcoin (BTC) mining dropped significantly in May as the effects of the fourth Bitcoin halving event set in.
The Bitcoin halving mechanism was designed to increasingly limit the issuance of 21 million BTC spread over decades. The April 20 halving reduced mining rewards to 3.125 BTC from 6.25 BTC.
While initial hype around the halving and the launch of Bitcoin Runes temporarily sustained the miners’ daily earnings, a strong revenue drop was recorded in May. On May 1, the total revenue earned from block rewards and transaction fees marked a new low of $26.3 million.
In contrast, Bitcoin miners earned roughly $6 million per day on average, according to data sourced from Blockchain.com.
Total value in U.S. dollars of Coinbase block rewards and transaction fees paid to miners. Source: blockchain.com
All the other days in May also recorded similar revenue patterns, signaling a new normal in Bitcoin mining revenue. Coincidentally, mining revenue peaked on April 20, marking an all-time high daily earnings of over $107 million for the first time in Bitcoin history.
Anticipating this significant drop, miners worldwide restrategized operations to remain profitable in the next phase of the Bitcoin economy. If not, miners would have to rely solely on Bitcoin’s high market value to support operations.
Read Cointelegraph's learners' guide to know more being a profitable Bitcoin miner from home.
CryptoQuant CEO Ki Young Ju calculated that Bitcoin needs to hold above $80,000 to keep mining profitable post-halving under current conditions. However, most miners took proactive measures to upgrade their mining equipment to reduce long-term operational costs while being competitive.
Related: Bitcoin reaches one billion transactions
For example, Bitcoin mining firm Bitfarms allotted $240 million to triple its hash rate. Previously speaking to Cointelegraph, Bitfarms chief financial officer Jeffrey Lucas laid out the firm’s drive to procure 88,000 highly efficient Bitcoin miners.
“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 the effort, Bitfarms recorded its lowest monthly earnings of 269 Bitcoin in over two years in April.
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