Recent on-chain analysis indicates that Bitcoin miners are experiencing unprecedented low payouts, with daily earnings recently falling to a low of around $34 million.
Significant Decline in Bitcoin Miner Earnings
Data from on-chain analytics platform CryptoQuant highlights a sharp decline in the revenue margins of Bitcoin miners. Miners traditionally generate income through two primary channels: block rewards and transaction fees.
The block reward is a predefined amount of Bitcoin given to miners as compensation for validating and adding a block to the blockchain.
Miners face a consistent block production rate due to a mechanism known as difficulty adjustment, which regulates how quickly blocks can be mined. This regulatory feature limits the number of blocks added over time.
As both the mining rate and the reward amount remain constant, one key variable that influences earnings is the market price of Bitcoin. Fluctuations in this price have a direct impact on miners’ revenue from the block rewards.
In addition to block rewards, miner income also relies on transaction fees. These fees arise from user transfers, as individuals attach small payments to incentivize miners to validate their transactions. When network traffic is low, users may not see the need to pay higher fees since transactions can be processed without delay.
Contrarily, during peak usage, transactions may linger in the mempool. To prioritize their transactions, users are compelled to offer higher fees, resulting in spikes in miner revenue during busy periods.
Below is a chart from CryptoQuant illustrating the trends in Bitcoin miner revenue over the last year:
The graph on the left illustrates a steep drop in Bitcoin miner earnings, with CryptoQuant noting that “Declining fees coupled with the plummeting price of Bitcoin are severely impacting miners’ margins.”
Earlier in the year, the revenue metric dipped to $34 million, marking its lowest point since April 10. However, this figure does not fully capture the dire circumstances miners are currently facing.
The right side of the chart displays the Miner Profit/Loss Sustainability metric, a comparative analysis of miner revenue against difficulty levels, effectively illustrating the current compensation fairness for miners. The downward trend indicates that miners are earning the least since July 2024.
Current Bitcoin Price Status
As of the latest market data, Bitcoin is hovering around $107,000, showing an increase of over 2% in the last week.
