The revenues of mining pool BTC.com fell by more than 50%, compared to its 2019 figures. According to Stephen Perrenod, the Bitcoin halving fueled the drop in pool revenues.
American research firm OrionX recently published an analysis of the first six months of the year 2020. It indicates that the profits of cryptocurrency mining pools were much lower than in the second half of 2019.
On June 23rd, the community learned that the annual added economic value of the 50 most prominent pools reached USD 4.8 billion. In November 2018, the same indicator reached USD 7.4 billion. The difference of USD 2.6 billion implies a drop by 35.1% in cryptocurrency mining pool revenues.
Annual added economic value (AEV) is a projection that calculates the income that each pool obtains through mining. According to the most recent edition of the report by OrionX, the top 5 of the pools with the highest AEV places F2Pool in first place. Although its current AEV is USD 832 million, it was USD 1.05 billion in November 2019. Poolin and Antpool follow with revenues of USD 614 million and USD 492 million, respectively.
Mining pool BTC.com has shown a further drop in its revenue from November 2019 to the present. Previously, BTC.com enjoyed an AEV of USD 1.12 billion. After a fall of more than 50%, the AEV of this pool is currently USD 442 million.
Effects of the Halving
Stephen Perrenod, analyst and partner at OrionX, notes that the recent Bitcoin halving has led to the drop in pool revenues. According to Perrenod, it was obvious that such an impact on the annual added economic value of the pools would occur after the halving.
Perrenod’s opinion seems base on the relationship between the price of Bitcoin in the market and the reduction of the reward per block mined. In other words, although the reward per block mined on the Bitcoin network underwent a reduction by half, the trading price of this cryptocurrency did not double. Therefore, the cryptocurrency did not maintain the balance between the revenues for mining and the operating expenses of this activity before the halving.
Another fact that reinforces Perrenod’s theory, regarding the influence of the halving on pool revenues, is that 15 of the pools that comprise the top 50 according to their AEV mine Bitcoin. Only Ethereum exceeds it, with a presence in 16 of the 50 pools on the list. However, Bitcoin generates almost three times Ethereum’s annual revenue, which keeps it in the first place of importance.
Curiously, the Bitcoin halving has had so much influence on the profits of mining pools, although this event had not occurred until May 11th. However, there are two aspects of this particular halving that are worth considering to better understand everything.
First, although the halving suddenly occurs at a certain height of the blockchain, there are previous stages that the community marks and that affect the network. Regardless of the price of the cryptocurrency on the market, the hash rate tends to rise as the halving approaches.
Second, the Bitcoin Cash and Bitcoin SV networks also had their respective halvings, which occurred before that of the original Bitcoin. These networks were born out of Bitcoin forks, and all three share many characteristics, including their pre-fork history.
The halving occurred in three cryptocurrencies that share the same mining algorithm (SHA-256) on immediate dates. That could also have affected the hash rate of each network and the profits of the mining pools that operate with them.
By Alexander Salazar