Bitcoin Mining Revenue Sinks to All-Year Low in August
August 2024 was the worst month for Bitcoin miners so far this year, with mining revenue in the network sinking to the lowest in almost a year, or since September 2023. According to data from Bitbo, combined earnings of $827.56 million were earned by miners, significantly down from the $927.35 million earned this July 2024. The $99.75 million decline thus shows the struggle that miners continue to have since Bitcoin went through its fourth halving back in April.
A Year of Struggle: How August 2024 Compares to September 2023
In September 2023, Bitcoin miners made $727.79 million, a figure close to the one reported last month. But whereas the price of Bitcoin has more than doubled since then—changing hands for $57.50K at the time of writing—the higher mining difficulty and lowered block rewards following the halving have bitten into miner profitability.
On-Chain Fees and Block Distribution
Contributing to the financial pressure was that the on-chain fees also continued to slide in August, down $4.14 million from the prior month. This fee decline further evidenced the decline in network activity and transaction volumes-important sources of revenues for miners.
Among the mining pools, Foundry USA continued to dominate, finding 1,248 blocks for a share of 29.10% of the total number mined. Antpool was close behind, mining 1,074 blocks for a share of 25.04%. These are indications of continued centralization in the hashrate, controlled by a few large pools, which could have potential implications for decentralization and the security of the network.
Slump in Revenue Directly Related to Declining Transaction Volumes
This decline in revenue directly follows the decline in the number of Bitcoins mined. Miners in August mined 13,843 BTCs, down from 14,725 BTCs mined in July. Consistent with expectations in the post-halving environment, mining difficulty has ballooned to a great extent; when combined with lower transaction volumes, this has caused a disastrous effect on mining profitability.
Impact on Mining Companies
The negative sentiment has extended to the publicly traded mining companies as well. Marathon Digital Holdings, Riot Blockchain, and CleanSpark have continued to see their stock price plummet for days on end as investors worry the mining industry is becoming increasingly unprofitable.
The Future: This Is Bitcoin Miners’ Moment of Truth
It puts miners at an important juncture as it treads into economic challenges precipitated by the low hash price actions of August’s revenue slump. However, the possibility of recovery exists if hash price increases continue to trail network activity. For the time being, the sector remains stretched, with many waiting to see exactly how this will set as the nascent sector evolves through the ongoing challenges.
