Bitcoin miners’ income returns to the level before the halving, or push Bitcoin prices to record highs
According to the latest research, key chain indicators such as Bitcoin mining revenue have returned to their pre-halving levels.
Data from the analytics data provider Glassnode shows that Bitcoin mining revenue has now returned to the level when the block reward was twice the current level.
When Bitcoin halved in mid-May, the price of BTC was approximately $9,000. On November 18, the price doubled to $18,000, suggesting a correlation: miners need to sell enough bitcoins to cover fees while maintaining profits. Rising prices mean greater profits.
The income of Bitcoin miners returned to the level before the halving. —Glassnode (glassnode) November 18, 2020
Blockchain.com confirmed this finding by tracking the total value of coinbase block rewards and the transaction fees paid to miners.
On November 18, the daily income (including block rewards and transaction fees) was $21.2 million, the highest level in a year. The last peak occurred on May 6 and reached 20.6 million US dollars. After the halving, the block reward dropped from 12.5 BTC to 6.25 BTC, and daily income plummeted to 7 million USD.
Soon after the pandemic triggered the collapse of the crypto market, mining revenue plummeted on March 18 this year. In less than a week, the price of Bitcoin fell by 45%. When mining revenue drops sharply, miners who over-utilize leverage may begin to surrender due to unfavorable market conditions.
When the price of Bitcoin is nearing its all-time high, the opposite seems to be happening right now.
Another factor that shows the health of the network and the satisfaction of the miners is the computing power. The current computing power of the Bitcoin network is only 10% lower than its maximum level.
Most Bitcoin mining takes place in China. After the rainy season in China ended, mining machines were shut down to prepare for migration due to the exhaustion of cheap hydropower. This led to a sharp drop of 37% in a quarter’s computing power to below 98 hashes per second.
According to data from Bitinfocharts.com, the computing power considered by most people has recovered to 143.4 EH/s, which is not far from the peak of 157.6 EH/s in mid-October.
The current mining revenue and the recovery rate of computing power indicate the continuation of the bull market, which may cause the Bitcoin price to reach a record high before the end of the year.
