Bitcoin Miners’ August Revenue Hits Yearly Low as Difficulty Surges

Highlights:

• August’s Bitcoin mining revenue fell over 10.5% from July.
• The drop in both mined coins and revenue is linked to increased mining difficulty.
• Bitcoin whales with 100 BTC reached a 17-month peak.

In August, Bitcoin miners’ revenue was $827.56 million, the lowest since September 2023. According to Bitbo data, this marked a significant drop of over 10.5% from July’s $927.35 million. However, revenue still increased by 5% compared to August 2023.

Bitcoin miners' revenue in August hit a new low this year, generating a total of $851.36 million, a decrease of $99.75 million from July, and a decrease of $4.14 million from the previous month in on-chain fees. Foundry USA mined 1,248 blocks, accounting for 29.10%, and Antpool…

— Wu Blockchain (@WuBlockchain) September 2, 2024

August’s earnings represent a 57% drop from the nearly $1.93 billion peak in March 2024, when Bitcoin hit a record high of over $73,500. August marked the worst revenue month for Bitcoin miners since September 2023, when they earned $727.79 million while Bitcoin was trading around $25,000. However, its price has since more than doubled, trading at $58,226 at the time of writing. The number of mined BTC fell slightly from approximately 14,725 BTC in July to 13,843 BTC in August. 

Rising Mining Difficulty and Costs Squeeze Bitcoin Miners Amidst Declining Transaction Volumes

The drop in both mined coins and revenue is attributed to the increasing difficulty of mining Bitcoin. In August, the difficulty level surged to a new high of 89.47 trillion, up from 86.87 trillion in July. This rise signifies that mining new Bitcoins demands more computational power and energy, thereby putting a strain on the profitability of mining operations.

Miners are squeezed by rising equipment costs, higher electricity prices, and Bitcoin’s fluctuating market value. The April halving, which reduced block rewards to 3.125 BTC, has compounded the pressure. High energy consumption remains a significant concern for miners. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin mining uses approximately 176 terawatt-hours of electricity annually, surpassing the energy consumption of many countries. As a result, regions with lower electricity costs gain a competitive edge in mining operations.

Moreover, falling transaction volumes have also affected miners’ earnings. In August, median fees contributing to a block reward accounted for only 2%. The 30-day average of daily confirmed transactions peaked at nearly 631,648 on July 31 but decreased to 594,871 by August 31.

Bitcoin Whales Holding 100 BTC Hit a 17-Month High

Despite the significant decline in Bitcoin mining revenue, the number of Bitcoin whales appears to be increasing. According to Santiment data, in the past month, 283 new wallets holding at least 100 BTC have been added. The data also reveals that 16,120 wallets now hold over 100 BTC, marking a 17-month high. Additionally, there has been a notable increase in the number of wallets with at least 10 bitcoins during this period.

🐳 As crypto prices have let retail traders down, Bitcoin whales are growing in number. A net gain of +283 wallets holding at least 100 BTC has emerged in just 1 month. The now 16,120 such wallets on the network has broken a 17-month high. pic.twitter.com/DcAU0W01Pk

— Santiment (@santimentfeed) August 31, 2024

The increase in whale accumulation coincides with a decline in Bitcoin’s price. Bitcoin has faced challenges in maintaining its upward trend recently, with CoinMarketCap data showing a 1% drop in BTC over the past 24 hours. Bitcoin has dropped over 10% in the last week, fluctuating between $57,000 and $64,000. Despite this volatility and struggle to hold $60,000, whales are using the dip as a buying opportunity to accumulate more coins.