Bitcoin transaction volume skyrockets as the halving approaches and miners cash in

9 March 2024

in Mining

Reading Time: 2 mins read

Bitcoin finally broke above its former all-time high price this past week, breaching $69,000 before mildly retreating. The run-up in price has led transaction volume to skyrocket on the network, and miners are cashing in on the increased activity.

According to data from The Block, the seven-day moving average of transaction volume on the Bitcoin network has reached its highest level since September 2022, 18 months ago.

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That increased volume has led to a corresponding increase in Bitcoin miner revenue, as the seven-day moving average of miner revenue, currently $65.4 million, is just shy of its all-time high of $67.2 million reached in May 2021.

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While the run-up in price has been attributed to the success of the spot Bitcoin ETFs in the United States, another upcoming event to watch is Bitcoin’s halving, in which the reward for miners gets cut in half. Traditionally, the halving, which is projected to occur in about 40 days, on or around April 19th, is seen as a bullish event for the price of Bitcoin.

Bitcoin last month also reached its highest mining difficulty level yet, meaning over the past 12 months, the computational cost of mining a Bitcoin block has more than doubled. However, following the halving, the difficulty level may fall as less efficient miners exit the network, no longer able to run their machines profitably given the lower reward.

Mining companies are spending big

The recovery of Bitcoin’s price has spurred mining companies to spend over $1 billion on new equipment since February 2023, according to a report in Bloomberg, citing public filings. Bloomberg also noted that miners are drawing energy at a record rate, about 33% more last month than the same period last year.

With Bitcoin mining, the challenge isn’t just purchasing the machines, but also finding sources of electricity cheap and reliable enough to compete with other mining providers. While Texas has been a popular destination for Bitcoin miners in recent years, others, especially Chinese companies, are investing in places like Ethiopia.

Mining companies CleanSpark and Riot have spent over $400 million each on purchasing new machines, according to Bloomberg, while one source cited in the report claims an unnamed company has mining machines worth “$350 million or $400 million” but that it has “nowhere to put them.”

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

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