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Bitcoin: The woes of BTC miners continue as prices crash

2min Read

Miners recorded a fall in fee revenue even as Bitcoin recorded its steepest drop of 2023 in the last week.

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  • As BTC’s price crashed, it caused a big dent in miners’ total earnings.
  • Miner reserve increased substantially indicating a hoarding mentality.

Bitcoin [BTC] miners’ predicament was set to continue as revenue earned through creating new blocks on the chain sank to new depths.

Read Bitcoin’s [BTC] Price Prediction 2023-24

As per an update shared by on-chain analytics firm Glassnode dated 19 August, the total transaction fees paid to miners fell to a new 5-month low of $21,256. This drop was worse than the previous 5-month low, recorded more than a month ago.

Miners’ woes continue

The fall in fee revenue came even as Bitcoin recorded its steepest drop of 2023 over the last week. After wiggling in a tight trading range for more than a month. the king coin broke steeply to the downside with weekly losses of 11% at press time, data from CoinMarketCap revealed.

It is a known fact that miners rely on fiat currency to finance their ever-increasing hardware and other infrastructure costs. Hence, they convert their BTC holdings into cash frequently.

However, as prices crashed, it caused a big dent in miners’ total earnings, as reflected in the graph below.

Source: Glassnode

Notice how the drop in revenue came abruptly following a sustained period of increase. This possibly threw their liquidation plans into disarray.

As per CryptoQuant, the amount of BTC held by miners increased substantially over the past week, forming a negative correlation with the price. As a result, miners developed a hoarding mindset and waited for prices to rebound slightly before dumping their stashes.

Source: CryptoQuant

Hash rate continues to rise in the long-term

Despite the ebbs and flows of the mining sector, it was pertinent to note that the overall hash rate for Bitcoin has only trended upwards over the years. A higher hash rate is imperative for the overall security and decentralization of the blockchain. It helps in preventing malicious players from launching assaults like the 51% attack.

Is your portfolio green? Check out the Bitcoin Profit Calculator

However, a rising hash rate demands installation of sophisticated and expensive mining equipment. With the decline in revenue as highlighted earlier, less-efficient miners might be eventually forced to shut down their rigs.


Aniket is a full-time journalist at AMB Crypto. With experience in news publishing and content management, he is now increasingly tangled up in the web of cryptocurrencies and blockchains. His focus lies on the intersection between cryptos and traditional finance. He prefers DC over Marvel, cats over dogs and Hyderabadi Biryani over Kolkata Biryani.
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