Bitcoin Miners See Worst Revenues in 11 Months as Difficulty Climbs

August 2024 was one of the worst months for Bitcoin miners in the past 11 months, showing that the revenue declined significantly to $827.56 million. This revenue figure represents a drop of over 10.5% from July’s revenues of $927.35 million, although it is a slight increase of 5% compared to August 2023, according to Bitbo data. The August total is 57% less than the 2024 April peak revenue of $1.93 billion in March, which was additionally supported by Bitcoin breaking its record of $73,500 on March, 13.

August Revenue Decline Marks Worst Month for Bitcoin Miners Since September 2023

The revenue posted in August indicates the worst year for Bitcoin miners since September 2023, where earnings were noted to be at $727.79 million when Bitcoin was around $25,000. Currently, the value of Bitcoin has gone up by more than double, trading at $57,315.

                                   Bitcoin miner monthly revenues have continued to fall throughout 2024 after a March peak. Source: Bitbo

The monthly earnings of Bitcoin miners have been falling continuously after reaching their highest point in March 2024. The data obtained from Bitbo show that there is a small decline to an average of about 13,843 Bitcoins mined in August from July’s average of about 14,725 Bitcoins.

The reduction in revenues is effects of lower transaction throughputs and higher mining difficulty level, which has further escalated after the April halving that cut the block rewards 3.125 BTC. In August, the median fees from block rewards were 2%, and the average number of new transactions confirmed daily reached the highest level of year-to-date peak of 631,648 on July 31 but then dropped to 594,871 on August 31, according to Bitbo and Blockchain.com.

However, the mining difficulty has greatly risen to an all time high of 89.47 trillion in August from 86 trillion in July. This has made mining difficult and less profitable and as a result has seen some miners move to venture in artificial intelligence where they have scored big deals and have earned mining billions.

Bitcoin Mining Faces Challenges as Miner Embraces Michael Saylor’s BTC Strategy

Marathon Digital has also relied on bond sales to fund its bitcoin acquisition, just like MicroStrategy did, due to declining profitability in bitcoin mining.

Michael Saylor, the Co-founder and ex-CEO of MicroStrategy, is another popular figure who has been at the forefront of large-scale BTC acquisition by corporations, using shareholder loans to turn MSTR, his software company into one of the biggest BTC wallet holders.

Now, another unexpected entity is adopting a similar approach: a bitcoin mining company. Historically, miners would anticipate getting BTC at a lower price through their mining activities, but Marathon Digital is going against this norm by issuing debt to fund bitcoin purchases instead of using loans to buy new mining machinery. This shift is a point that proves that this year the mining sector has been facing numerous hurdles than ever before.

​Marathon Digital has recently launched $300 million convertible notes—bonds that can be exchanged for stock—using most of the cash to buy 4,144 bitcoins. The firm stated this,  “Given the current mining hash price, the internal rate of return (IRR) suggests that buying bitcoin through debt or equity issuance offers greater benefits to shareholders until conditions improve.” The term “hash price” refers to mining profitability.

This strategy for acquiring bitcoin attracted a lot of negativity when the ongoing market downturn occurred in 2022 though MicroStrategy’s investment was deeply in loss. However, the narrative has changed since MicroStrategy continues to purchase bitcoins, which are worth billions of dollars more than the initial investment.

Marathon and MicroStrategy could be considered proxies for the bitcoin trajectory since Saylor started acquiring the asset in 2020, and both served as these proxies especially before bitcoin ETFs were approved earlier this year.

In 2023, however, the situation has diverged significantly. MicroStrategy’s stock is up by 90% while still mimicking the bitcoin trend; on the other hand, Marathon’s stock is down by about 40% due to the rising challenges in the mining sector. For the latest updates on this story and other cryptocurrency market news, keep following DeyThere.