Category: Bitcoin Mining

Bitcoin (BTC) network fees reached an all-time high on 21 April which was just under $60 USD average per transaction. These have now subsided close to the current average of around $20 USD.

During the week of 21 April the Bitcoin hashrate drop was one of the major reasons the transaction price shot up. Since then, transaction prices have been going back to the normal as backlogged transactions have been completed and the hashpower restored.

Different Perspectives on Fees

There are some supporters of higher fees, they believe that an increase in fees will also increase the amount of individuals/companies that want to mine Bitcoin which is essentially a good thing for decentralisation.

Sustained high fees are expected and necessary to prevent denial of service (spam) attacks that can threaten decentralization and therefore censorship resistance. Sustained high fees will secure the Bitcoin network long term. Fees are designed to pump forever. Embrace them.

Matt Odell, Co-Founder of CoinPrices.io [source]

The opposition argues that higher fees can threaten centralisation by scaring people away because they can’t afford the fees. The fewer people adopt Bitcoin the less need there will be to run nodes to process many transactions. This could also push users toward alternative blockchains which cater more to everyday users.

But now that consumer hardware for mining is becoming more popular there is an opportunity for individuals and businesses to play a part in the network.

For reference, other coins have different network fees:

• Litecoin (LTC): 0.0001%
• Ethereum (ETH): 9.53%
• USD Coin (USDC): 6.49%

Read more about this in a recent test transferring $100 AUD using different cryptocurrencies to discover the actual fees.

Recent market data shared by Glassnode, a cryptocurrency on-chain analytics platform, suggests the Bitcoin (BTC) has reached its top for the cycle yet, given that the rate of BTC accumulating is still increasing especially amongst Long Term Holders (LTHs) and miners.

Bitcoin’s Top is Not in Yet

Over the past few days, some people had panic-sold their Bitcoin following the recent drop of Bitcoin’s price below the $50,000 USD. Since the correction, the cryptocurrency is yet to reclaim the $60,000 USD level, which spurred some sentiment that Bitcoin’s top is in. However, Bitcoin’s LTH accumulating rate and miners’ net position change suggest otherwise.

In a tweet on Thursday, the analytics platform noted that Bitcoin accumulated back in 2020 is still increasing and that the BTC supply held by the long-term holders is up by over 67 percent. The Bitcoin positions of LTHs need to decline significantly in order to put the top in for the leading cryptocurrency, according to Glassnode.

Miner Are Not Selling Either

A separate data from Glassnode also confirmed that Bitcoin miners have been accumulating Bitcoin. Despite the recent dip, the accumulation rate for miners increased even further, as seen in the net position change below.

Miners were known as sellers, as they needed to sell their Bitcoin mining rewards to cover expenses incurred during operation. However, they have been HODLing their rewards for the past month. This trend somewhat indicates that miners are still bullish on the cryptocurrency over the long term.

Another cryptocurrency analytics platform, Santiment, confirmed this growing rate of accumulation among BTC whale investors, precisely BTC addresses HODLing at least 10,000 BTC. About 90,000 BTC has been added to these addresses since April 5.

Bitcoin miners have been generating much more in revenue over the recent months, according to data from Glassnode – an on-chain crypto analytics platform. The revenue usually consists of the cryptocurrency block subsidy and transaction fees. The increase in miners’ revenue follows the recent growth of Bitcoin in market value. 

BTC Miners Average $50 Million Daily

As Rafael Schultze-Kraft, the CTO of Glassnode recently shared on Twitter, Bitcoin miners have been averaging $50 million in daily revenue for the past 30 days. The current record represents over 300 percent increase compared to the record a year ago, which was around $12 million daily revenue.

Overall, Bitcoin miners netted about $1.5 billion mining revenue in March alone, most of which came from the block subsidies paid to them.

BTC miners’ revenue has increased over the past few months. As of January, miners generated about $1.1 billion in revenue, which also represented about a 62 percent increase from the revenue in December. 

Note that, Bitcoin block reward was recently halved to 6.25 BTC on May 11, which is 50 percent less than rewards in the months before. Yet, miners are still able to generate this much in revenue, mostly because of the increase in the price of Bitcoin.

Since Bitcoin’s third halving, the value of the cryptocurrency has increased by over 550 percent.

Most Miners are HODLing

Despite the massive increase in miners’ revenue, on-chain data from Glassnode also confirmed that they are HODLing most of their BTC rewards. For the past weeks, the miner net position change has remained positive, as Crypto News Australia reported on Wednesday. This means that BTC miners have been accumulating new Bitcoin for the stated period. This is quite bullish in the long-term, as it creates scarcity for BTC.

Bitcoin miners are still not selling new BTC, according to on-chain data from Glassnode, a crypto analytics company. Since the past few days, the miner net position change has remained positive, showing that miners are HOLDing their coins, despite the fact that more mining machines recently went online on the BTC network. 

Bitcoin Hash rate ATH

About a week ago, Crypto News Australia reported an increase in Bitcoin mining hash rate at 165.992 million Tera Hash per second (TH/s), which is the highest point. This simply means that more mining machines are currently active on the Bitcoin network to mine the cryptocurrency. Most of these miners, however, prefer HODLing their rewards than depositing to exchanges for selling, as seen in the BTC miner net position change.

There’s also an uptick in BTC miner unspent supply, which covers new Bitcoin that hasn’t been moved from the original mining addresses, confirming that miners are becoming strong hands. 

The increasing price of Bitcoin could be one factor why miners prefer to HODL their rewards at this time. Miners reasonably need to sell some of their Bitcoin profits to cover the expenses incurred during operation, such as electricity bills. By not selling BTC, it seems to convey how confident and bullish they are on the cryptocurrency.

A Bullish Sign for BTC Market?

Noteworthily, miners are the gateway for new Bitcoin to enter the market. As they continue to stack more coins, the cryptocurrency might become more scarce, yet still in high demand. This is quite a healthy and bullish indicator for the Bitcoin market in the long-term, as scarcity often drives up the market value of an asset with huge demand.

Bitcoin is already becoming scarce as many investors are continually moving out their coins from exchange for HODLing. Data from CryptoQuant shows that there is less than 2.3 million BTC in all exchanges.

As the leading cryptocurrency, Bitcoin (BTC), is staging a comeback to the US$60,000 price level, its network hash rate just reached another all-time high.

This indicates that more mining machines have been deployed on the BTC network. What’s more interesting to note is that most miners are seemingly not selling off their coins at the moment. Hence, there may not be a significant increase in the number of BTC deposited to exchanges, even with the spike in hash rate.

Bitcoin Hash Rate Sets New All-Time High at 165.99M TH/s

According to the data from Bitcoin explorer Blockchain.com, the network hash rate reached another major high of 165.992 Million Tera Hash per second (TH/s). Hash rate is basically the measuring unit of the processing power of the Bitcoin network. So, an increase in hash rate denotes that there are more miners processing transactions on the BTC blockchain.

The development today is not so surprising, given that the BTC mining industry has been growing rapidly. In recent months, many companies purchased more advanced mining machines to increase their processing power. This somewhat coincides with the growth in the market price of Bitcoin. Some companies tend to increase their mining hash rate when there are massive increases in Bitcoin price.

Meanwhile, a spike in the BTC hash rate is usually followed by an increase in mining difficulty to offset the number of resources required to mine Bitcoin.

Bitcoin Price Update

Bitcoin was trading at US$57,750 at the time of writing. The cryptocurrency reached as high as US$58,200 on Monday. From a circulating supply of 18.6 million BTC, the crypto’s market capitalization sits around US$1.078 billion.

Overall, the crypto market has increased by 2.57 percent over the last 24 hours, possibly due to the mild increase in BTC.