According to Glassnode, BTC miners made over $ 4 million in less than an hour on February 12, the largest hourly revenue in history. Zo affects miners’ earnings?
BTC miners’ earnings and their growth
In May 2020, Bitcoin passed its third halving in its history, halving the amount of block mining awards. As a result, miners’ revenues fall by 50% overnight, which in the short term may put a strain on mining operations.
At the same time, the hashrate of the Bitcoin network has also achieved a new record.
The halving of the reward for the mined block takes place every four years. This reduces the rate at which the remaining supply of Bitcoin is brought to the market.
As Bitcoin is approaching its maximum supply of 21 million, the mining rate of new BTC is cut in half. But halving the cut can put massive pressure on miners who depend on the BTC they mine to cover the operational costs of maintaining the network. In theory, when it comes to halving, Bitcoin’s price is expected to rise due to a smaller supply of new coins entering the market. Therefore, a higher BTC price can compensate for the lower number of BTC miners rewarded for block mining.
This week, Bitcoin miners generated the largest hourly revenue in history, despite mining half of the BTC they mined in previous years.
This shows that Bitcoin is working as intended and that its value actually increases with each successive halving. This motivates miners to increase computing power. Glassnode analysts report:
#BTC miners just made over $ 4 million in one hour – the highest hourly income in Bitcoin history.
#BTC miners just made over $ 4 million in a single hour – the highest hourly miner revenue in Bitcoin’s history so far.
– glassnode (@glassnode) February 11, 2021
Another reason for the growing revenues of miners is the growing number of transactions in the network and the related fees paid to miners. Miners’ revenue consists of transaction fees and block rewards, the former accounting for approximately 13.5% of total revenue, according to Clarkmoody data.
Will miners’ income continue to grow along with the BTC price?
PlanB, anonymous analyst behind the popular Stock-to-Flow (S2F) pricing model, said Bitcoin is on track to hit $ 288,000.
The S2F model is largely based on the relationship between the supply of BTC and newly mined coins. The BTC price trend is predicted based on its shortage. PlanB wrote:
The price of #bitcoin after halving in 2020 is similar to the 2012 and 2016 period. I’ve added targets for the S2F ($ 100,000) and S2FX ($ 288,000) models. These are average prices. The actual BTC price will hover around these amounts. If the boom in 2021 is like 2017, it will be $ 100,000, if we follow 2013 .. $ 288,000.
#bitcoin price track after 2020 halving is between 2012 and 2016 tracks. I added S2F ($100K) and S2FX ($288K) model targets. Targets are average prices, actual BTC price will oscillate around targets. If 2021 bull market follows 2017 then $100K it is, if we follow 2013 .. $288K🚀 pic.twitter.com/RdRP7VUqqF
— PlanB (@100trillionUSD) February 5, 2021
Currently, Bitcoin is consolidating after hitting a new record high above $ 48,500. If the BTC price approaches $ 60,000, it will cause the cryptocurrency’s market capitalization to exceed $ 1 trillion.