Bitcoin Miners Are in a Critical Situation, with Revenues Plunging to Levels Not Seen in Over a Year

Since the last halving of April 2024, where block rewards fell from *6.25 BTC to 3.125 BTC, miners have seen their margins melt away like snow in the sun.

Bitcoin miners are facing a critical situation as revenues have plummeted to levels not seen in over a year. In September, all miners generated a meager $816 million. To add insult to injury, transaction fees have also reached a historic low of $13.86 million. This drastic decline in revenue poses a significant threat to the entire network.

The steep fall in miners' revenues began after the last halving in April 2024, which saw block rewards decrease from 6.25 BTC to 3.125 BTC. Despite this reduction, the network's computing power has continued to increase, recently reaching a record hashrate of 643 EH/s. However, this high hashrate seems to be working against the miners.

According to JP Morgan, the average profitability of miners has dropped by 6% in a month. This decline is putting a strain on miners, especially those who operate at a large scale. As a result, the overall efficiency of the Bitcoin mining process is decreasing.

Here is a summary table of key Bitcoin mining data for September 2024:

Hashrate stagnates : a sign of lost confidence ?

As miners struggle to stay afloat, the hashrate (total computing power dedicated to the network) shows worrying signs of stagnation. In fact, despite a recent uptick in August, it has fallen back to mediocre levels, casting a serious doubt : are miners beginning to lose confidence in the future of Bitcoin? With falling prices and market instability, some of them are wondering if it’s still profitable to invest in ultra-expensive equipment. And if miners throw in the towel, what will become of the network’s security ?

Miners trapped : more costs, less profit

The numbers don’t lie: mining is becoming less and less profitable. Operational costs are soaring, hitting peaks in September with $650 million spent just to keep machines running. So, between skyrocketing energy prices and a wobbling crypto market, miners find themselves at a dead end. Why continue burning money for so little return? Many could simply unplug their machines and move on.

Bitcoin on the brink : will miners quit ?

With a 4 % drop in Bitcoin’s price in 24 hours, miners who still had a glimmer of hope might well change their minds. Every day, more and more are asking whether it’s worth it. If this trend continues, the hashrate could plunge, compromising the security of the entire network. Think this is a disaster scenario? Just wait to see what happens if Bitcoin’s price keeps falling. The network could face a risk of centralization, a hard blow to the very ethos of crypto.

A dark future for Bitcoin mining ?

As miners reassess their strategy, a burning question remains: how long can they hold out under these conditions ? Is Bitcoin mining still viable ? Caution is advised, but if the market doesn’t recover, the answer might be a resounding no.

Don’t stay too optimistic. The world of Bitcoin is more unpredictable than ever, and miners might be the first to pay the price.

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