Bitcoin miners are likely starting to feel the weight of the lower block subsidy post halving, as profit margins shrink in light of lower average revenue per terahash.
Data from The Block Research shows that the seven day moving average of Bitcoin miner revenue per terashashes per second (TH/s) has dropped to an all-time low of $0.048. TH/s is a metric used to determine the rate of processing power required to mine a block on the Bitcoin network.
Miners earn revenue from the block subsidy paid out to them when they successfully mine a block and transaction fees. Barring periods of extreme network congestion, fees on the Bitcoin blockchain are typically never at significantly high levels, making the block subsidy the most important source of revenue for miners.
After the halving, the subsidy dropped from 6.25 BTC to 3.125 BTC, but momentum from the launch of the Runes protocol sent the number of transactions and average fees up significantly — something that ended up offsetting the impact of the lower bloc subsidy post halving.
Now, the picture for Bitcoin miners looks far more bleak, as data from Blockchain.com shows daily revenue earned by miners dropping to a yearly low of $26.5 million — a stark contrast to the $107 million recorded on the day that immediately preceded the halving.
Meanwhile, the Bitcoin mining environment remains incredibly competitive, evidenced by the hashrate remaining above 600 exahashes per second (EH/s). According to CryptoQuant analyst Ki Young Ju, the price of bitcoin needs to stay above $80,000 for miners to remain profitable.
The drop off in miner revenue is something that market participants had foreseen in the lead up to the halving, with analysts at Coinbase predicting that the reduced profitability margins could lead to consistent bitcoin sell pressure from miners.
Whether or not these new dynamics has changed the way investors perceive Bitcoin mining firms seems less obvious, however, as major US-based Marathon Digital saw its shares surge 18% on Monday. The Nasdaq-listed firm saw its share price boosted after S&P Global announced it would be adding the stock to the S&P SmallCap 600.
May 7 03:12am ET: The headline was updated for clarity reasons.