Bitcoin Miner Income Decreases, Runes Hype Fades

According to the latest data from CryptoQuant, the daily earnings of Bitcoin miners have fallen sharply, falling to $63.6 million on Tuesday after excitement for the Runes protocol waned.

This decline coincides with the effects of the recent Bitcoin halving event that took place last Friday night. The event halved the amount of new bitcoins issued per block to 3.125. As a result, the new supply of bitcoins has been reduced from 900 to 450.

Post-Half Volatility: Mining profits will decrease as payments

Despite this reduction, earnings by miners rose to $106.8 million in the half-day due to higher bitcoin transaction fees. However, these revenues quickly retreated to $63.6 million.

This figure represents a 35% drop from first-half daily earnings, which were previously at a high of around $78 million.

In half a day, transaction fees rose to $80 million, which is 75% of the total mining revenue.

This congestion is mainly caused by the network congestion caused by the launch of the Runes protocol. The protocol introduces meme coins to the Bitcoin blockchain.

It deviates from the standard BRC-20 token by employing the Unpaid Transaction Output (UTXO) model. This model facilitates the creation of altcoins directly on the network through the “etching” process.

Since then, transaction fees have been halved to levels before they were cut, accounting for 35 percent of the miner's total revenue. Incredibly, the first half-block alone blocked $2.6 million in payouts and rewards, placing itself near the top of Bitcoin's most valuable blocks. The following blocks fetched high prices ranging from $1.3 million to $2 million.

Analysis shows that the first 77 blocks of the season generated $75 million in revenue. This compares sharply with the $35 million earned in the last 77 blocks of the previous period.

Baylor Landing, Scientific Director of Bitcoin Mining Core, highlighted the impact of these changes.

“Halfing? It's more like doubling,” Landing said, referring to the sharp increase in revenue after the halving.

However, as the initial excitement around Runes faded, so did the crowds and fees. According to data from Dune Analytics, Runes transactions fell by 33.6% on April 24. Rune Transactions previously accounted for 69.5% of all transaction fees during the half day.

Read more: What Happened in the Last Half of Bitcoin? Predictions for 2024

This reduction in block rewards, combined with fluctuating transaction fees, has put pressure on miners' earnings. Hash price is currently down to $0.07 per TH/s, marking the lowest since October 2023.

Hash value measures revenue per computational power. Therefore, this decline poses a threat to the sustainability of mining operations, especially as the industry shows a further decline in mining revenue.

In response, leading mining companies are said to be strengthening their financial position. Firms such as Riot Platform ( RIOT ), Marathon Digital Holdings ( MARA ), and Hut 8 Corp ( HUT ) are focusing on strategic expansion and consolidation, according to Bernstein Research.

Read more: 5 best platforms to buy Bitcoin mining stocks before 2024 halving

CleanSpark's CEO predicts the industry will eventually consolidate around four major players. RIOT, MARA, CLSK and Cipher Mining (CIFR) are expected to take the lead.