On-chain data shows that Bitcoin hashrate has recently paused its upward trend, even though miner revenues are currently at noteworthy levels.
Bitcoin miner profits have been increasing recently
In a new post on X, Axel Adler Jr, author of CryptoQuant, discussed the latest trends in Bitcoin miner total revenue. “Total miner income”, as the name suggests, measures the total amount of income earned by miners as a whole through their activities on the BTC network.
Miners make money in two ways: block subsidies and transaction fees. The first of these, block subsidies, refers to the rewards (BTC) that miners receive for solving blocks on the network.
Block subsidies are given by the network itself and are always fixed in BTC value. In contrast, transaction fees, another component of miner revenue, are paid to miners by individual senders on the network and are highly variable.
This is because users simply charge the appropriate fare depending on the traffic conditions at the time. Block space is limited, so if there is congestion on the network, senders who want to forward first must pay enough to be prioritized by miners.
In general, the transaction fee portion of miner revenue tends to be much smaller than block subsidies. Below is a graph shared by an analyst that shows how Bitcoin miner total revenue has changed over the past few years.
Looks like the value of the metric has gone up in recent months | Source: @AxelAdlerJr on X
As seen in the graph, miner total revenue rose to a high level at the beginning of 2024, but suddenly collapsed around April. The reason for this sudden drop was the fourth halving.
Halving is a periodic event that occurs every four years on the Bitcoin blockchain, where the block subsidy is permanently halved. Given that miners depend on block subsidies for their income, it is not surprising that this event would have dire consequences for their incomes.
From the chart, it is clear that the value of the indicator has now reached the $45 million mark and that the indicator has recovered to some extent over the past few months. This is significantly lower than the 2024 peak, but still high compared to the previous cycle.
This improvement in total miner revenue is partly due to increased activity on the blockchain, but the main driver is the rising price of Bitcoin. As the spot price of the asset increases, the dollar value of the block subsidy will naturally increase as well.
Interestingly, even though revenues are currently at a respectable level, hashrate, a measure of the total amount of computing power miners have attached to the blockchain, is actually trending downward.
The trend in the 7-day average BTC Hashrate over the past year | Source: Blockchain.com
Hashrate can be considered a reflection of sentiment among Bitcoin miners, and at the moment these on-chain validators appear to be cautious as they have paused expansion, but this Potentially this is likely due to wanting to see what the BTC bull market will be during the current uncertain times.
BTC price
Bitcoin has remained volatile over the past few days, with its price fluctuating wildly in both directions. Currently, the coin has increased in price to over $105,000.
The price of the coin appears to have seen overall flat movement recently | Source: BTCUSDT on TradingView
Dall-E, Featured Image from Blockchain.com, Chart from TradingView.com
