While Bitcoin’s price has soared since late 2023, miners are getting absolutely crushed. The numbers tell a brutal story: mining revenue plummeted to $827.56 million in August 2024, down 10.5% from July and a staggering 57% from March’s peak of $1.93 billion. Talk about a face plant.
The April 2024 halving hit like a sledgehammer. Block rewards got slashed in half to 3.125 BTC, and monthly earnings nosedived from 28,500 BTC to under 13,800 BTC. Adding insult to injury, transaction fees are practically pocket change at just 2% of total rewards. Not exactly the jackpot miners were hoping for.
Miners got absolutely hammered by the halving. Block rewards plunged from 28,500 to 13,800 BTC, with measly transaction fees rubbing salt in the wound.
Mining difficulty? Through the roof. It smashed records at 92.67 trillion by September 2024. Translation: miners need more computational muscle than ever to earn the same rewards. The dramatic rise mirrors the trend from 2023 when difficulty more than doubled from 35 T to 72 T. Double whammy when combined with those halved block rewards. Ouch.
The cost situation is even more painful. Take Riot Platforms – their cost to mine one Bitcoin shot up to $35,376 in Q3 2024. Factor in equipment depreciation, and that number balloons to $75,506. Remember when they were mining at negative costs in 2023? Those were the days.
The financial bloodbath continues. Riot’s net loss widened 93% to $154.4 million in Q3 2024. Their per-share loss hit $0.54, even with revenue jumping 65% to $80 million. Some miners are jumping ship to artificial intelligence operations, chasing those sweet AI deals worth billions. Despite the industry turmoil, Bitcoin’s price remained strong at Bitcoin price $57,315.
Sure, revenue levels are still higher than during the 2022 crypto winter. But that’s cold comfort when you’re hemorrhaging money. The industry’s getting creative though – some miners are staying afloat by finding cheaper energy sources or completely overhauling their operations.
But let’s be real: with costs soaring and revenues tanking, something’s gotta give. The math just doesn’t add up anymore.
