For the first time since December 2020, bitcoin miners’ revenue has once again surpassed that of Ethereum’s competitors. In June, bitcoin miners collectively raised 633 million euros, while Ethereum miners’ revenue was only 521 million euros.
Worst month of 2022
The month of June has proven to be the worst month of 2022 for Ethereum miners at least. In the year 2021, monthly sales still regularly shot above 1 billion. This is no longer the case and the chart below from The Block sums it up well.
During the bull run of 2020 and 2021, the global mining industry enjoyed an enormous boost. However, tougher times are now ahead.
The coming period will be mainly a test for the miners who have not been careful in recent months. What you often see in a bull run is that people become optimistic and no longer see the risks.
Not only with traders, but also with miners who, for example, concluded unfavorable energy contracts with which they are now shooting themselves in the foot. Several bitcoin miners have had to sell all their bitcoin reserves for several reasons, for example.
Bitcoin mining surpasses ethereum mining
Despite all the weakness in the market, there is a small celebration for bitcoin maximalists. Indeed, for the first time since December 2020, bitcoin miners’ revenue has once again surpassed that of ethereum miners.
This seems to be due in particular to the fact that activity in the DeFi world has completely dropped off and NFTs are also no longer as popular for a while. Suddenly there is little left on Ethereum, which is also reflected in the relatively low transaction costs of 1.49 euros per transaction. The lowest level since 2020.
Except for the small victory due to the fact that bitcoin mining brought in more than ethereum mining last month, there is actually little to celebrate for bitcoin. Indeed, revenue for the miners simply fell by 26 percent compared to May. Also compared to June 2021, bitcoin miners recorded a decline of about 20 percent.
Why are miners’ turnovers under pressure?
The reason that miners’ turnovers of both bitcoin and ether are under pressure is simple. To calculate the total turnover of miners over a given period, simply take the number of coins earned and multiply it by the price at that time.
Thus, the declines in turnover are directly linked to the performance of the bitcoin and ethereum exchange rates. As soon as these recover, the turnover of the miners will also skyrocket.
Until then, the parties who have the opportunity should hold their breath and proceed as cautiously as possible. After all, no one can say for sure how much longer we will have to put up with these market conditions.
The U.S. Federal Reserve is currently doing everything it can to fight inflation, and so far it is doing so at the expense of bitcoin and other risk assets. Once the economy starts to falter, there is a chance that the Federal Reserve will change course. However, with a U.S. unemployment rate of 3.6 percent, there is no sign of that yet.