Bitcoin’s price has been steadily increasing since January 23, resulting in 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. These revenues primarily come from rewards for creating new blocks and confirming transactions on the Bitcoin blockchain, with miners currently receiving 6.25 BTC for every successful block. The price of Bitcoin reached a new all-time high of $72,953 on March 12 before retracing to $69,655. However, it is still up 246% over the past year.
The mining industry has also experienced significant revenue growth, with a 212% increase in U.S. dollars. Bitcoin mining revenue climbed from $25.23 million on March 17, 2023, to approximately $78.89 million on March 11. In addition, the Bitcoin hash rate, which measures the computing power securing 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 contribute to its security.
The increase in miner revenue and hash rate can be attributed to the rising on-chain activity. The number of transactions on the Bitcoin network reached a record high of 974.7 million transactions, a 20% increase over the past year.
While the surge in Bitcoin’s price is attributed to increased capital inflow into U.S. spot Bitcoin ETFs, the upcoming halving event is also significant. Bitcoin halving occurs every four years and involves a 50% reduction in miner rewards. The next halving is expected in April, which will decrease miner rewards from 6.25 BTC to 3.125 BTC. Miners have been using their profits from the recent price rally to expand their operations and prepare for the reduced earnings.
Evidence from on-chain data suggests that miners are taking profits from the price rally. This could be due to the anticipation of reduced earnings after the halving, increased mining difficulty, and the hash rate reaching record highs. It is common for miners to sell their Bitcoin holdings during a bull market, especially with the significant increase in on-chain transactions.
Data also shows that BTC balances in miner wallets have dropped to a three-year low of 1.8 million BTC, further confirming the offloading of Bitcoin by miners.
As the price of Bitcoin continues to rise, miner revenues are growing, and more profit bookings are being made by market participants. It is important for readers to conduct their own research before making any investment or trading decisions, as every move in the market carries risk.