In 2023, Bitcoin (BTC) miners have been accumulating a daily average of $2 million in transaction fee revenue, as per data sourced from Coinmetrics. This figure represents a remarkable 400% surge compared to the averages observed in the previous year.
Bitcoin miners experience a year-over-year increase in revenue.
In a December 23rd post on X (formerly Twitter), Jameson Lopp, Co-founder and CTO of Casa, a BTC self-custody solutions company, reported that Bitcoin miners amassed revenue surpassing $10 billion in 2023, contributing to the cumulative total of $57 billion over the past 15 years. In the post, Lopp considered the possibility of miners immediately converting Bitcoin to fiat currency, but deemed it improbable, noting that miners often opt to “HODL” onto their Bitcoin assets for potential long-term gains.
During this month, the total daily revenue for miners, combining block rewards and transaction fees, reached an annual high of $64 million, marking an almost 400% increase from its year-to-date value, according to data from Ycharts. Throughout December, daily mining activity revenue has consistently remained above $33.85 million, indicating substantial profit for miners in the fourth quarter of 2023.
Additionally, Coin Metrics disclosed that quarterly mining revenues in 2023 surpassed $2 billion over the last three quarters, with transaction fees collected by miners rising to over $180 million in both Q2 and Q4.
As concerns over profitability intensify, both mining hashrate and difficulty experience a notable surge.
In 2023, the Bitcoin network experienced a significant surge in mining hashrate. According to the State of the Network Q4 2023 Mining report by Coin Metrics, the hashrate surged from 250 Exahashes per second (EH/s) at the beginning of the year to 480 EH/s.
This increase in hashrate has translated to a 26% uptick in Bitcoin mining difficulty over the past three months, as indicated by Coinwarz data.
The escalating BTC mining hashrate and difficulty raise concerns about potential declines in profitability, particularly with the impending halving event that is set to reduce rewards from the current 6.25 to 3.125.
Nevertheless, experts suggest that Bitcoin’s halving may subsequently ease the rapid growth in mining difficulty. Additionally, the rising hashrate underscores improving network security, which could propel BTC’s price towards a bullish market.
Earlier this month, Julio Moreno, Chief Researcher at CryptoQuant, shared on X that the Bull-Bear market cycle indicator is signaling a shift into a bullish period for the first time since July. According to the indicator, Moreno anticipates that block rewards will outpace mining difficulty growth, leading to increased profitability for miners despite the escalating mining difficulty.