- The portion of miner revenue coming from transaction fees fell to a 4-month low.
- The hashrate of the Bitcoin network reached an all-time high, requiring more investment in mining equipment.
Bitcoin fortune [BTC] miners has taken a drastic turn in a very short time. After making a kill during the BRC-20 coin frenzy in early May, most miners were struggling with diminished earnings at the time of writing.
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According to Glassnode, the share of miner revenue coming from transaction fees has decreased. It reached a 4-month low from July 9.
📉 #Bitcoin $BTC Percentage of miner income from fees (7d MA) just hit a 4-month low of 2.247%
View statistics:https://t.co/NphJIZNcsL pic.twitter.com/iowHQhQWEI
— glassnode alerts (@glassnodealerts) July 9, 2023
Transactions fall on the Bitcoin network
Miners should be incentivized to validate transactions and secure the Bitcoin network. The incentives come in two forms: block rewards and transaction fees. While the former becomes less lucrative as the rewards gradually decrease every four yearsminers look at fees paid by users to cover their expenses.
However, the number of transactions on the network has been steadily falling from its all-time high in May. The prolonged phase of low volatility and increased investor readiness for HODL tokens has proven to put a damper on miners’ minds.
The exchange supply fell to a multi-year low, suggesting that there was less BTC to buy and buy, and therefore fewer trades to profit from for miners.
Source: Sentiment
Hashrate pain is on the rise
However, the number of transactions increased dramatically over the weekend. As a result, the Bitcoin network hashrate hit an all-time high, according to a report from the Bitcoin mining research firm Hashrate index. Growing hashrate poses a new set of challenges for miners. They need to expand their mining infrastructure and purchase specialized hardware.
But the report highlighted that prices of premium Application-Specific Integrated Circuits (ASIC) equipment have risen sharply, causing more pain for miners.
Source: Hashrate Index
Read Bitcoin [BTC] Price Forecast 2023-24
Meanwhile, the price of hashish has been falling over the past week. An indicator of mining profitability, the hash price is positively correlated with BTC price movements. After rallying in June, BTC has remained sluggish since early July CoinMarketCapwhich causes miners more inconvenience.
Source: Hashrate Index