Bitcoin miners have had a tough month as revenue and profitability have dropped in May. However, hash rates are still high.
Bitcoin (BTC) mining revenues and profitability have continued to fall along with the price of the asset this year as the crypto winter deepens.
May has been one of the worst months for Bitcoin miners in the past year as revenue and profitability continue to fall. Daily Bitcoin mining revenue decreased as much as 27% in May, according to Ycharts data sourced from Blockchain.com.
On May 1, the analytics provider reported daily revenue of $40.57 million for BTC miners, but by the end of the month, it had fallen to $29.37 million. On May 24, daily mining revenue hit an eleven-month low of $22.43 million.
Daily mining revenue peaked at about $80 million in April 2021 but has since fallen 62% to current levels.
It is worth recalling that back then, coal mine accidents and subsequent inspections in Xinjiang lacerated the power supply to the regional cryptocurrency mining industry, which forced miners to turn off their application-specific integrated circuit (ASIC) hardware, which exclusively generates computing power to secure and put “work” into Bitcoin’s proof-of-work.
Public Reactions
In a tweet post, @zackvoell, interested in Bitcoin mining and markets, claimed that, “May ended the streak for miners. Every month since August 2021 saw cumulative mining revenue above $1b until now. Last month’s mining revenue: $906m.”
Mining profitability, which is a measure of daily dollars per terahashes per second, has hit its lowest levels since October 2020, according to Bitinfocharts. The cryptocurrency metrics provider currently reports a mining profitability of $0.112 per day for 1 Th/s.
Additionally, the metric has seen a 56% decline since the start of the year and is down more than 75% from the 2021 highs of $0.450 per day per Th/s.
However, Bitcoin network hash rates remain high, with the current daily average standing at 211.82 exahashes per second, according to Bitinfocharts. The figure is down about 16% from its all-time high of just over 250 Eh/s on May 2.
High hash rates but low profitability may suggest that there is a much higher level of competition in the Bitcoin mining sector than previously seen. In previous bear markets, miners shut down their equipment when the price of the asset fell and trades temporarily became unprofitable.
Glassnode: “Falling Revenues”
According to Glassnode, flows from miners to exchanges just hit a four-month high, suggesting they may be making preparations to sell some coins to cover falling revenues.
On a Tweet, @glassnodealerts, an account that monitors interesting movements of on-chain metrics and exchange flows for $BTC, $ETH, $LTC, and #ERC20s, stated that, “Bitcoin $BTC Miners to Exchange Flow (7d MA) just reached a 4-month high of 6.188 BTC. A previous 4-month high of 6.002 BTC was observed on 07 April 2022.”
In general terms, the cryptocurrency market appears to remain at the mercy of the stock market. While the stock market has mounted a modest rally during the May 23 session, all four major indices are in or near bearish territory. We can only expect any bearish or bullish price action in the stock market to be reflected in the cryptocurrency market.
By Audy Castaneda
