Bitcoin Miners Face 1 Year Low Payout at 34 Million Daily

Bitcoin miners are currently facing their lowest payout in approximately a year, with daily revenue plummeting to $34 million. This significant drop in revenue is attributed to a combination of falling transaction fees and a decrease in the Bitcoin spot price. Miners earn their revenue through two primary sources: the block subsidy and transaction fees. The block subsidy is a fixed BTC-denominated reward given to validators for adding a block to the chain, while transaction fees are attached to transfers as a small payment for validators.

The block subsidy is influenced by the Bitcoin spot price, as changes in the price directly affect miners’ income from this reward. Additionally, the difficulty feature ensures that miners can only add blocks at a fixed rate, further constraining the block subsidy. Transaction fees, on the other hand, are connected to the level of activity on the Bitcoin network. During periods of high congestion, investors are willing to pay higher fees to ensure their transactions are processed quickly, leading to a spike in total transaction fees received by miners.

According to data from an on-chain analytics firm, the combined daily revenue of Bitcoin miners has recently experienced a sharp decline. The metric reached a low of $34 million, which is the lowest value since April 10th. However, this comparison does not fully capture the severity of the current situation for miners. A model that compares miners’ revenue against the difficulty to determine how fairly paid the group is, indicates that the recent low in mining revenue corresponded to miners being the most underpaid since July 2024.

The decline in miner revenue is a result of falling transaction fees and a drop in the Bitcoin spot price. As the price of Bitcoin decreases, the value of the block subsidy also decreases, leading to lower overall revenue for miners. Additionally, during periods of low network activity, investors have little incentive to pay high transaction fees, further reducing miners’ earnings. This combination of factors has led to the current situation where miners are facing their lowest payout in a year.

At the time of writing, Bitcoin is trading around $107,000, up over 2% in the last seven days. Despite the recent decline in miner revenue, the price of Bitcoin has shown some resilience, potentially providing a glimmer of hope for miners in the near future. However, the current situation highlights the challenges faced by Bitcoin miners in an ever-changing market environment.