Bitcoin’s price has been steadily rising since January 23, leading to a surge in miner revenues. On March 11, daily Bitcoin mining rewards reached a record high of $78.89 million, surpassing the previous high of $74.4 million set in October 2021. Miner revenues primarily come from rewards for creating new blocks and confirming transactions on the Bitcoin blockchain. Currently, miners receive 6.25 BTC for every successful block they create, in addition to transaction fees.
Bitcoin reached a new all-time high of $72,953 on March 12, although it has since retraced to $69,655. Nonetheless, it has seen a 246% increase in the past 12 months. The mining industry has also experienced significant revenue growth, with a 212% increase in U.S. dollars.
Bitcoin mining revenue has risen from $25.23 million on March 17, 2023, to approximately $78.89 million on March 11. Additionally, the Bitcoin hash rate, which measures the computing power used to secure the network, reached an all-time high of 676 exahashes per second on February 2. This indicates that more miners are joining the network to ensure its security.
The increase in miner revenue and hash rate can be attributed to the rise in on-chain activity. The number of transactions on the Bitcoin network reached a record high of 974.7 million, a 20% increase over the past 12 months.
While the surge in Bitcoin’s price has been linked to increased capital inflow into U.S. spot Bitcoin ETFs, another significant event to watch is the upcoming halving. Bitcoin halving occurs every four years and involves a 50% reduction in miner rewards. The next halving is expected in April, and it will decrease miner rewards from 6.25 BTC to 3.125 BTC.
In preparation for the halving, miners have been using their profits from the recent rally to purchase more equipment and expand their operations. This is to ensure they remain profitable despite the reduced earnings. Several major Bitcoin mining firms have ordered over $1 billion worth of mining rigs in the past month.
On-chain data shows that Bitcoin miners are taking profits from the recent price rally. This could be due to the anticipation of reduced earnings after the halving, increased mining difficulty, and record-high hash rates. Miner selling is common during bull markets, especially with the significant increase in on-chain transactions.
Bitcoin balances in miner wallets have dropped to a three-year low of 1.8 million BTC, further confirming the offloading of profits. As Bitcoin’s price continues to rise, miner revenues are increasing, leading to more profit bookings among market participants.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and consider the risks involved before making investment decisions.