Mass Decline in Bitcoin and Ethereum Miner Revenue in June

bitcoin china ethereum mining Jul 02, 2021

Bitcoin and Ethereum miner revenue declined massively in June. Bitcoin has seen the largest decrease in total mining revenue in its history as June ends. A reduction in total transactions and fees are the main contributing factors to the total value dropping 42% from May 2021 to June 2021.

Total daily transactions saw a significant drop in the month of June. Levels haven’t been this low since August 2018. June saw roughly 100,000 fewer daily transactions in comparison to the all-time high of 300,000 daily transactions occurring just a month before in May. Both total users and fee rates saw a large reduction rate, with total users dropping 62% and the share of bitcoin mining revenue from transaction fees fell to 5% in June from about 9% in May.

Bitcoin’s hash rate has seen a 50% decrease since its peak in May. China’s recent crackdown on cryptocurrencies has been the largest contributing factor with a reported 90% of Bitcoin’s mining capacity being shut down by the state. However, mining companies are relocating to other countries to continue business rather than permanently shutting down. Despite the monetary value of Bitcoin decreasing drastically, making it less profitable to mine, the decreased hash rate will counteract the dwindling profitability of mining.

Ethereum, the second-largest cryptocurrency based on Market Cap, saw a 53% decrease in monthly miner revenue from May 2021 to June 2021. It, too, was heavily affected by the Chinese crackdown on cryptocurrencies. Ethereum hash rate decreased by 20%. Transaction fees and gas prices roughly contributed only 15% of the total Ethereum value for the month of June 2021 while subsidy payments to miners took up the rest of the 85% of Ethereum value.

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