• Bitcoin miners’ margins have increased significantly as a result of China’s crackdown, but ether miners’ revenue has surpassed BTC’s

  • In July, Bitcoin miner revenue increased 15.8 percent to $971.83 million. This increase in miner revenue followed three months of declines following the all-time high of $1.75 billion in May. Since a low of $20.02 million on July 3rd, daily bitcoin miner revenue (7DMA) has also been increasing. It is currently worth around $40 million, down from a high of $67.17 million on May 11. In contrast, ether miners’ revenue fell by 2.4 percent in July to $1.08 billion after reaching a high of $2.41 billion in May. Daily Ether miner revenue (7DMA), which has been declining since $130.32 million on May 15, is now back up to $46.18 million.

    Despite a drop in miner revenue, Ether miners have earned significantly more than Bitcoin miners for the third month in a row. It is also the longest period in which Ether miner revenue has been higher than Bitcoin miner revenue. On July 22nd, ether daily miner revenue fell to a low of $30.84 million, the lowest since early January. This drop was primarily caused by transaction fees, which had been consistently above $15 million since February, peaking at $74.65 million before falling to $4.23 million on June 30. The transaction fees are now set at $12 million.

    A Blessing from China’s Shutdown

    While Bitcoin miners made huge profits when the price of BTC reached an all-time high of nearly $65k in mid-April, miners are now making even bigger profits when the price of BTC is around $43k. This is due to China’s crackdown on crypto mining, which has increased profits for miners outside of the country, such as Quebec, Texas, Kazakhstan, and Malaysia, where miners continued to mine even as the hash rate and difficulty of the Bitcoin network dropped significantly. Active miners have been paying approximately $3.6 billion per year for power, based on an estimate that producers’ average cost is 5 cents per kilowatt-hour (kWh) and prices ranging from as low as 2 cents in Argentina and 3 cents in Kazakhstan to 8 cents and above in the United States. According to Alex de Vries, a Dutch economist whose website Digiconomist tracks Bitcoin’s carbon footprint, miners were spending $7.2 billion on electricity prior to China’s shutdown, which accounted for at least half of all mining shares. While miners in other parts of the world paid the same prices for electricity, rent, insurance, and labor, their chances of earning the newly generated 6.25 BTC increased. Bitfarms, a Quebec-based company founded in 2017, mined a total of 178 BTC in February, earning roughly $7.8 million in “mining profits” at a $8,400 mining cost per Bitcoin earned. Then, last month, it mined 391 BTC, more than double the amount mined in February, for an estimated $14 million in mining profits, or 80% more than in February, while their costs remained flat. This occurred in July, when the BTC price was between $29k and $42k, and it has since begun to recover. However, with Chinese miners returning to the scene after having relocated overseas, as evidenced by the recovering hash rate and difficulty, competition will rise once more, and profits will normalize.

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