Bitcoin miners are feeling the pinch as they report dropping revenues following the halving event that took place in April. With over a month passing since the halving, miners are seeing a significant decrease in rewards from the Bitcoin network compared to the previous four years.
The halving event, which occurs once every four years or after every 210,000 blocks, cuts the block rewards miners receive in half. This time around, the block rewards reduced to 3.125 BTC from 6.25 BTC, making it more challenging for miners to earn the same rewards as before. Despite this, the halving mechanism helps Bitcoin remain deflationary and supports robust price growth.
Cipher Mining, a prominent mining firm, reported a 43.9% decline in BTC earned in May compared to April. The company mined 166 BTC in May, down from 296 BTC in April. However, Cipher is maintaining positive net cash flows by expanding its mining territory and equipment to mine more blocks in the future.
Marathon Digital is also taking steps to counter the revenue drop by actively engaging in mergers and acquisitions and acquiring other mining outfits. The company saw a 27.5% decline in rewards in May, mining 616 BTC compared to 850 BTC in the previous month.
Similarly, Stronghold Digital Mining reported a decline of over 47% in rewards from April to May, mining 82 BTC in May compared to 155 BTC in April. The company’s revenues also dropped by 46% to $5.2 million in May. Other mining firms like Riot Platforms and CleanSpark experienced similar drops in rewards and revenues.
Despite the challenges, the Bitcoin mining ecosystem anticipated the halving and made preparations in advance. This includes consolidating operations through mergers and acquisitions and expanding to overseas territories for more efficient energy supplies.
As miners navigate through the aftermath of the halving event, they are adapting and strategizing to ensure their operations remain profitable in the long run.
