Bitrabo Editorial
Bitcoin Miner Revenue Approaching Annual Average
Recent on-chain data indicates that Bitcoin mining revenue is approaching its yearly average, suggesting that miner capitulation may be subsiding.
In a recent analysis by James Van Straten, looking into the current state of BTC miners, various metrics are used to assess miner conditions. One common indicator is the hashrate, measuring the total computing power connected to the Bitcoin network.
Van Straten, however, focuses on daily total revenue from these chain validators. Miner revenue comprises block subsidy and transaction fees.
The block subsidy is the BTC miners’ reward for solving blocks, while transaction fees are the charges users include in transactions. Historically, block subsidies have contributed significantly more to miner revenue than transaction fees.
Displayed in the chart below is the evolution of combined Bitcoin miner revenue over recent years.
The graph reveals that Bitcoin miner revenue surged alongside the price rally that began in October last year, hitting a new all-time high by April this year.
This surge was driven by two main factors. Firstly, the fixed block subsidy in BTC grows in line with the asset’s price rally. Secondly, network activity surged due to increased market traffic during the bull run, making transaction fees more lucrative.
The spike in revenue was fueled by the adoption of Runes, a new technology on the chain facilitating the minting of fungible tokens. These transactions, like any others on the network, impact network economics.
After reaching the ATH revenue level, miner revenue sharply declined, falling below the 365-day simple moving average (SMA).
This drop followed the fourth Halving event, which cuts block rewards in half every four years, significantly affecting miner revenue.
Since this decline, Bitcoin mining revenue has remained below the 365-day SMA, leading to pressure on miners and forcing some into capitulation.
However, with the recent recovery, miner revenue has risen to $35 million, close to the $40 million annual average, indicating a potential conclusion to miner capitulation, according to Van Straten.
If the metric can reclaim the 365-day SMA, Bitcoin may see further upward momentum, as per the analyst’s insights.
Bitcoin Price
Bitcoin’s price has plateaued around $66,200 as it continues its recovery.