Bitcoin Bull Run Has Miners Earning Pre-Halving Profits

In letter

  • The income for Bitcoin miners is again at half value.
  • Bitcoin’s halving in May cut the block reward in half.
  • However, the rising price of BTC has now compensated for this.

Already in May, the reward for mining new Bitcoin was halved. Bitcoin is so popular, however, that miners have pushed revenue back to pre-May levels, data from market research firm Glassnode shows.

Due to a feature built into the Bitcoin protocol, the reward the network offers miners for processing transactions halves approximately every four years. This event, known as the Bitcoin Halving, effectively means miners will have to work twice as hard to get the same profits.

The logic is that the more Bitcoin is mined and the network is used more and more, Bitcoin becomes more difficult to mine and thus its value increases.

And so it came about that on May 11th, total mining revenues for bitcoin miners fell from $ 19 million to $ 7.9 million. Then, almost punctually, mining revenues began to rise again as more powerful miners went online and the price of Bitcoin rose.

Total miners’ income. Image: glass knot

But it didn’t get too crazy until this month, when prices hit unseen highs since the bull run in December 2017. On November 1, mining revenues were up to $ 13 million a day.

And then, on November 9th, it happened: Bitcoin mining revenues at $ 19.9 million were comparable to the days before Bitcoin, almost a million dollars higher than in May.

In the following days, too, no massive decline can be observed. As of yesterday, the last day that Glassnode is showing data, all miners’ Bitcoin mining revenues were $ 18.3 million.

Part of the fluctuation has to do with the price of Bitcoin. According to BitInfoCharts, the mining hash rate – the combined computing power of Bitcoin miners – had already reached highs in July before halving.

Bitcoin hash rate. Image: BitInfoCharts

But while the price of Bitcoin stagnated over the summer, its bull run drew miners’ wallets this month.