Bitcoin (BTC) miners earned over $ 4 million in less than an hour on February 12, according to Glassnode, making them the largest hourly earnings in history.
In May 2020, Bitcoin received its third block bonus by half in its history, halving the number of new bitcoins that were withdrawn.
After the block reward is halved, the number of miners who can give up computing power is halved. Thus, mining revenues are reduced by 50% overnight, which could negatively impact production in the short term.
Meanwhile, the hash rate of the Bitcoin network also peaked at a constant high, with a fourth consecutive difficulty adjustment of about 2.5% expected in seven days.
So why is Bitcoin mining revenue growing?
The bonus is being cut in half every four years to reduce the supply of bitcoins remaining in the market.
As bitcoin approaches a steady flow of 21 million, the rate of new bitcoin production is cut in half. But the halving could put huge pressure on miners who depend on BTC, which they are expanding to cover operating costs in the short term.
In theory, the price of bitcoin is expected to rise when it shrinks in half due to the reduction in the supply of new currencies entering the market. Consequently, the higher BTC price can offset the smaller number of BTC miners who are rewarded for mining blocks.
Bitcoin miners made the largest hourly profit in history this week, despite having mined half of their chosen bitcoins compared to last year.
This demonstrates that Bitcoin works as intended when the value increases after the block reward is halved and encourages miners to increase hash rates and invest in network security. Glassnode analysts said:
“#BTC miners earned over $ 4 million per hour – the highest hourly earnings in Bitcoin history.”
Another reason for the high income of miners is the increase in the number of transactions on the network and the related fees paid to miners as a result. According to Clarkmoody, the miner’s income consists of transaction fees and block bonuses that miners collect, while previously they accounted for approximately 13.5% of total revenue.
Will mining revenues grow with the price of BTC?
PlanB, the pseudonymous Bitcoin explorer behind the popular Stock-to-Flow (S2F) model, said Bitcoin will soon reach $ 288,000.
The S2F model is heavily based on BTC supply (reserves) and new bitcoin extraction (flow) with a scarcity-based forecast of BTC price development. PlanB wrote:
Track bitcoin price after 2020 by half between 2012 and 2016. I’ve added targets for the S2F ($ 100,000) and S2FX ($ 288,000) models. The targets are average prices and the actual BTC price will fluctuate around the targets. If the bull market for 2021 follows 2017, it will be $ 100K, if we look at 2013 … $ 288K. ”
Bitcoin is currently consolidating after hitting an all-time high of $ 48,500. If the price of BTC approaches $ 60,000, it will lead to the market value of the cryptocurrency exceeding $ 1 trillion.
Additionally, analysts say that with a price tag of around $ 56,000, Bitcoin has significant gamut options. Consequently, the potential for BTC to grow to about $ 53-56 thousand in the first half of 2021.
Lex Moskovsky, a cryptocurrency researcher and quantitative trader, also confirmed that market sentiment remains positive due to increased institutional interest. He said:
“Any organization, company or person holding an ETF below or below the USD TSLA also has #Bitcoin. Tesla pulled out the main Trojan horse. Let’s greet Warren Buffett and SNB. Save TSLA? BTC “. “