Block rewards generated from fees alone reached a six-month high of 27%. However, over 5,000 Bitcoins have been offloaded by miners since the rally to $37k.
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Mining Rewards Hit Six Months High
The recent bitcoin rally to $37k has not only done good to the price of bitcoin but has also resulted in an increase in price for bitcoin miners.
Data according to the hash rate Index shows that the hash price exploded to $94.55 per PetaHashes per day (PH/Day), the highest in six months, representing an increase of 27% WoW.
Hashprice is a Bitcoin mining metric that represents the miner’s revenue on a per terahash basis.
It is simply the average value of the daily rewards a miner gets per terahash. These rewards are received from transaction fees and newly mined bitcoin from validating blocks.
Hash Price can be as volatile as bitcoin itself, as it is derived from the ratio between bitcoin’s market price and the network’s total hash rate, which determines mining difficulty.
Transaction Fees Increases
One of the major contributing factors to the increase in hash price is the sudden spike in transaction fees over the last 10 days.
The portion of block rewards coming from fees climbed to a six-month peak of 27% on 9th November.
The increase in transaction fees is directly fueled by the recent increase in the activities on the Bitcoin network.
Recall that there has been a lot of positive news for Bitcoin lately. From the very much talked about ETF approval to the very anticipated bitcoin halving which will reduce bitcoin’s supply.
Miners Are Taking Profit
Data according to CryptoQuant has revealed a significant drop in coins held in miners’ wallets since the late-October rally. More than 5,000 BTC coins have been offloaded by miners since then.
Miners use block rewards to offset the expenses linked to their mining equipment and electricity. Therefore, they regularly convert their holdings into cash to pay bills.
Nevertheless, in periods of minimal price fluctuations when the returns are less lucrative, miners hold onto their reserves and anticipate a market upswing before selling their coins.
Recall that miners faced considerable challenges during the cryptocurrency market downturn in 2022, with their earnings plummeting hugely.
The 2023 rally was much needed, as the financial stability of miners is linked to the security and decentralisation of the Bitcoin network.
The 2023 rally was much needed, as the financial stability of miners is linked to the security and decentralisation of the Bitcoin network.