The effects of the fourth Bitcoin halving event in May resulted in a significant decrease in earnings from Bitcoin mining. The halving mechanism was designed to gradually reduce the issuance of 21 million Bitcoin over time. On April 20, the halving took place, reducing mining rewards from 6.25 BTC to 3.125 BTC.
Initially, there was a lot of excitement surrounding the halving and the launch of Bitcoin Runes, which temporarily sustained miners’ daily earnings. However, in May, there was a sharp decline in revenue. On May 1, the total revenue earned from block rewards and transaction fees reached a new low of $26.3 million. Prior to the halving, miners were earning an average of $6 million per day.
This trend continued throughout May, indicating a new normal in Bitcoin mining revenue. Interestingly, mining revenue reached an all-time high of over $107 million on April 20, marking the highest daily earnings in Bitcoin history.
In anticipation of this significant drop in earnings, miners worldwide reevaluated their operations to ensure profitability in the next phase of the Bitcoin economy. Otherwise, they would have to rely solely on the high market value of Bitcoin to support their operations.
According to CryptoQuant CEO Ki Young Ju, Bitcoin needs to maintain a value above $80,000 to remain profitable for miners under current conditions. However, most miners took proactive measures to upgrade their mining equipment and reduce long-term costs to stay competitive.
For instance, Bitfarms, a Bitcoin mining firm, invested $240 million to triple its hash rate. Jeffrey Lucas, the chief financial officer of Bitfarms, explained that the company’s goal was to acquire 88,000 highly efficient Bitcoin miners.
Despite their efforts, Bitfarms experienced its lowest monthly earnings in over two years in April, earning only 269 Bitcoin.
In conclusion, the fourth Bitcoin halving event had a significant impact on mining earnings, leading to a decrease in revenue. Miners have had to adapt their operations to remain profitable in the changing Bitcoin economy, with many upgrading their equipment to reduce costs.