Bitcoin Miners Struggle Post-Halving, Seek New Revenue Streams
The Essentials at a Glance
- Bitcoin miners are facing major challenges following the recent halving.
- Mining rewards have significantly decreased, affecting profitability.
- The hashrate continues to rise, intensifying competition among miners.
- Technology upgrades are a potential solution to increase efficiency.
Bitcoin Miners Struggle After the Halving
The recent halving of Bitcoin (BTC) drastically reduced rewards for miners. This has led to significant financial strain, even though the hashrate – the network’s computing power – continues to rise. While Bitcoin’s price initially reached a new high of over $70,000 USD after the halving, it has since stabilized around $58,629 USD. This represents a 2.41% drop within 24 hours, reflecting market uncertainty.
Declining Profitability for Bitcoin Miners
After the halving in 2024, miners received only 471.88 BTC, equivalent to approximately $28.1 million USD. In comparison, during the 2020 halving, the reward was still 7,010 BTC, which was worth around $75.99 million USD at the time. This drastic reduction highlights how much miners’ revenues have decreased. According to an analysis by Jefferies, an investment bank, the average daily revenue per exahash (EH/s) fell by 11.8% in August compared to the previous month. This trend underscores the growing financial pressure miners are facing.
Rising Hashrate Intensifies Competition
Despite declining profitability, the hashrate in the Bitcoin network has continued to rise. In 2020, it stood at 140.93 million terahashes per second (TH/s). By 2024, however, it reached a new high of 695.84 million TH/s. This increase in computing power indicates that competition among miners is becoming more intense, as more resources are required to successfully mine new blocks.
Technological Upgrades as a Solution?
To counteract declining profitability, many North American mining companies are investing in new hardware. These modern machines offer double the computing power compared to their predecessors, without consuming more energy. According to Fred Thiel, CEO of Marathon, this upgrade cycle is crucial to reducing the economic pressure on miners. He emphasizes that it is not necessary to open new locations or tap into additional energy sources – it’s simply about modernizing systems.
Some companies have already found innovative ways to tackle these challenges. Core Scientific, which emerged from bankruptcy earlier this year, has repurposed its infrastructure to support artificial intelligence (AI) and high-performance computing (HPC). This shows that there are ways to adapt to changing market conditions and explore new revenue streams.
Our Assessment
The Bitcoin halving has significantly impacted mining profitability. The rising hashrate and declining rewards are putting miners under pressure. However, there are solutions, such as technological upgrades, that can increase efficiency and reduce costs. Companies that adapt quickly and invest in new technologies have a better chance of remaining successful in the long term. It will be interesting to see how the market evolves and which innovations will prevail.
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