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Home Bitcoin

Bitcoin miners face revenue crisis: Exploring BTC’s August drop

September 3, 2024
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Bitcoin miners face revenue crisis: Exploring BTC’s August drop
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  • Bitcoin miners face a dilemma as they incurred their lowest mining rewards in the month of August, squeezing their profits.
  • However, a strategic approach could help them navigate these challenges.

Bitcoin [BTC] faced a volatile end to August, with its price fluctuating within a specific range between $64,000 and $57,000. At the time of writing, Bitcoin was valued at $58,385.

As bulls strive to breach the $64K barrier, Bitcoin miners are facing their lowest earnings of the year, marking the worst performance in 11 months.

Consequently, AMBCrypto investigated whether this sharp drop in BTC rewards might drive miners to exit the trade.

August brings Bitcoin miners’ lowest revenue 

In August, Bitcoin miners recorded their lowest revenue-generating month since September 2023, with the number of mined coins dropping significantly. 

Additionally, mining incurs high operational costs for Bitcoin miners. If the rewards fail to cover these expenses, miners may face capitulation.

According to AMBCrypto’ analysis of the chart below, miner revenue fell to $820 million in August, marking a decline of over 10% from July’s $927 million. 

Bitcoin miners reduced rewards

Source : BitBo

Interestingly, this August figure represents a 57% decrease from the peak of nearly $1.93 billion in March, the same month Bitcoin reached its ATH of over $73K.

This showed a big drop in mining revenue despite Bitcoin’s high price earlier in the year – But why? AMBCrypto investigated.

Following the last BTC halving in April, which reduced block rewards to 3.125 BTC per block, mining difficulty increased sharply. 

Bitcoin mining difficulty

Source : Blockchain.com

As a result, mining difficulty surged to an all-time high of 89.47 trillion in August, up 3% from 86.87 trillion in July.

With more Bitcoin miners joining the network, validating transactions became harder, reducing the number of coins mined and the revenue earned.

See also  Mystery Bitcoin Whale Who Bought 10,000 BTC Has Been Exposed

In short, this indicated that rising mining difficulty, driven by the Bitcoin halving, has significantly squeezed miners’ profitability. So, are Bitcoin miners exiting the trade?

Miners strategic positioning counters short-term volatility

Put simply, the hash rate measures the total computational power being used to mine and process transactions on the Bitcoin network. 

If this figure drops significantly, it can be an indicator that miners are leaving the network.

mining dhash rate

Source : Blockchain.com

The chart above revealed a striking trend. Interestingly, whenever BTC tested a crucial resistance level, the hash rate also jumped.

According to AMBCrypto, this suggested that miners were more engaged or optimistic about potential price movements.

However, the hash rate has absorbed a notable decline since the last week of July, falling from 667 million to 620 million, a drop of 7%.

While not extreme, it suggested that miners are reacting to changing conditions, potentially due to lower rewards. 

However, the BTC miner net position change has shifted to positive since mid-August, despite reduced miner rewards.

Bitcoin miners reduced rewards

Source : Glassnode

This indicated that, even though miner rewards have decreased, miners have begun accumulating more Bitcoin rather than selling it.

Additionally, AMBCrypto noted that miners might be strategically positioning themselves by accumulating BTC when prices are relatively low.


Read Bitcoin’s [BTC] Price prediction 2024-25


Overall, despite squeezed profitability, miners remain confident in Bitcoin’s long-term gains as highlighted by the positive net change.

However, this confidence could lead to increased mining difficulty in the long run, potentially causing miner rewards to plunge further.

Next: Will XRP see a major bull run in October? Why it’s a real possibility

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  • Bitcoin miners face a dilemma as they incurred their lowest mining rewards in the month of August, squeezing their profits.
  • However, a strategic approach could help them navigate these challenges.

Bitcoin [BTC] faced a volatile end to August, with its price fluctuating within a specific range between $64,000 and $57,000. At the time of writing, Bitcoin was valued at $58,385.

See also  Exec - Bitcoin's post halving prediction could see BTC's price hit $200K

As bulls strive to breach the $64K barrier, Bitcoin miners are facing their lowest earnings of the year, marking the worst performance in 11 months.

Consequently, AMBCrypto investigated whether this sharp drop in BTC rewards might drive miners to exit the trade.

August brings Bitcoin miners’ lowest revenue 

In August, Bitcoin miners recorded their lowest revenue-generating month since September 2023, with the number of mined coins dropping significantly. 

Additionally, mining incurs high operational costs for Bitcoin miners. If the rewards fail to cover these expenses, miners may face capitulation.

According to AMBCrypto’ analysis of the chart below, miner revenue fell to $820 million in August, marking a decline of over 10% from July’s $927 million. 

Bitcoin miners reduced rewards

Source : BitBo

Interestingly, this August figure represents a 57% decrease from the peak of nearly $1.93 billion in March, the same month Bitcoin reached its ATH of over $73K.

This showed a big drop in mining revenue despite Bitcoin’s high price earlier in the year – But why? AMBCrypto investigated.

Following the last BTC halving in April, which reduced block rewards to 3.125 BTC per block, mining difficulty increased sharply. 

Bitcoin mining difficulty

Source : Blockchain.com

As a result, mining difficulty surged to an all-time high of 89.47 trillion in August, up 3% from 86.87 trillion in July.

With more Bitcoin miners joining the network, validating transactions became harder, reducing the number of coins mined and the revenue earned.

In short, this indicated that rising mining difficulty, driven by the Bitcoin halving, has significantly squeezed miners’ profitability. So, are Bitcoin miners exiting the trade?

See also  GBTC's discount to its Bitcoin funds narrows in October. What's next?

Miners strategic positioning counters short-term volatility

Put simply, the hash rate measures the total computational power being used to mine and process transactions on the Bitcoin network. 

If this figure drops significantly, it can be an indicator that miners are leaving the network.

mining dhash rate

Source : Blockchain.com

The chart above revealed a striking trend. Interestingly, whenever BTC tested a crucial resistance level, the hash rate also jumped.

According to AMBCrypto, this suggested that miners were more engaged or optimistic about potential price movements.

However, the hash rate has absorbed a notable decline since the last week of July, falling from 667 million to 620 million, a drop of 7%.

While not extreme, it suggested that miners are reacting to changing conditions, potentially due to lower rewards. 

However, the BTC miner net position change has shifted to positive since mid-August, despite reduced miner rewards.

Bitcoin miners reduced rewards

Source : Glassnode

This indicated that, even though miner rewards have decreased, miners have begun accumulating more Bitcoin rather than selling it.

Additionally, AMBCrypto noted that miners might be strategically positioning themselves by accumulating BTC when prices are relatively low.


Read Bitcoin’s [BTC] Price prediction 2024-25


Overall, despite squeezed profitability, miners remain confident in Bitcoin’s long-term gains as highlighted by the positive net change.

However, this confidence could lead to increased mining difficulty in the long run, potentially causing miner rewards to plunge further.

Next: Will XRP see a major bull run in October? Why it’s a real possibility
Tags: AugustBitcoinBTCsCrisisDropExploringfaceMinersrevenue

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Top 5 Things to Expect from MetalCore Season 1

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    Balanset-1A constitutes an advanced solution for rotor balancing of rotors in their own bearings, engineered by Estonian company Vibromera OU. The device ensures professional equipment balancing at €1,751, which is significantly cheaper than traditional vibration analyzers while maintaining superior measurement accuracy. The system allows in-place balancing directly at the equipment’s operational location without necessitating removal, which is essential for preventing production downtime.
    About the Manufacturer
    Vibromera OU is an Estonian company focusing in the creation and manufacturing of devices for technical diagnostics of industrial equipment. The company is established in Estonia (registration number 14317077) and has branches in Portugal.
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    Official website: https://vibromera.eu/shop/2/

    Technical Specifications
    Detection Parameters
    Balanset-1A ensures high-precision measurements using a dual-channel vibration analysis system. The device measures RMS vibration velocity in the range of 0-80 mm/s with an accuracy of ±(0.1 + 0.1?Vi) mm/s. The operating frequency range is 5-550 Hz with optional extension to 1000 Hz. The system supports rotation frequency measurement from 250 to 90,000 RPM with phase angle determination accuracy of ±1 degree.
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    Full Kit Components
    The standard Balanset-1A delivery includes:

    Measurement unit with USB interface – primary module with integrated preamplifiers, integrators, and ADC
    2 vibration sensors (accelerometers) with 4m cables (alternatively 10m)
    Optical sensor (laser tachometer) with 50-500mm measuring distance
    Magnetic stand for sensor mounting
    Electronic scales for accurate measurement of corrective masses
    Software for Windows 7-11 (32/64-bit)
    Plastic transport case
    Complete set of cables and documentation

    Performance Capabilities
    Vibrometer Mode
    Balanset-1A functions as a comprehensive vibration analyzer with abilities for measuring overall vibration level, FFT spectrum analysis up to 1000 Hz, measuring amplitude and phase of the fundamental frequency (1x), and continuous data recording. The system offers display of time signals and spectral analysis for equipment condition diagnostics.
    Balancing Mode
    The device supports one-plane (static) and dual-plane (dynamic) balancing with automatic calculation of corrective masses and their installation angles. The unique influence coefficient saving function allows considerable acceleration of follow-up balancing of identical equipment. A dedicated grinding wheel balancing mode uses the three-correction-weight method.
    Software
    The easy-to-use program interface provides step-by-step guidance through the balancing process, making the device usable to personnel without specific training. Key functions include:

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    Polar diagrams for imbalance visualization
    Result archiving with report generation capability
    Metric and imperial system support
    Multilingual interface (English, German, French, Polish, Russian)

    Fields of Use and Equipment Types
    Industrial Equipment
    Balanset-1A is efficiently used for balancing fans (centrifugal, axial), pumps (hydraulic, centrifugal), turbines (steam, gas), centrifuges, compressors, and electric motors. In manufacturing facilities, the device is used for balancing grinding wheels, machine spindles, and drive shafts.
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    The device represents exceptional value for agriculture, where reliable operation during season is vital. Balanset-1A is employed for balancing combine threshing drums, shredders, mulchers, mowers, and augers. The capability to balance on-site without equipment disassembly allows preventing costly downtime during critical harvest periods.
    Specialized Equipment
    The device is effectively used for balancing crushers of various types, turbochargers, drone propellers, and other high-speed equipment. The speed frequency range from 250 to 90,000 RPM covers practically all types of industrial equipment.
    Advantages Over Alternatives
    Economic Value
    At a price of €1,751, Balanset-1A provides the functionality of devices costing €10,000-25,000. The investment pays for itself after preventing just 2-3 bearing failures. Cost reduction on third-party balancing specialist services amounts to thousands of euros annually.
    Ease of Use
    Unlike complex vibration analyzers requiring months of training, mastering Balanset-1A takes 3-4 hours. The step-by-step guide in the software permits professional balancing by personnel without specific vibration diagnostics training.
    Portability and Independence
    The complete kit weighs only 4 kg, with power supplied through the laptop’s USB port. This permits balancing in remote conditions, at isolated sites, and in difficult-access locations without separate power supply.
    Versatile Application
    One device is appropriate for balancing the most extensive spectrum of equipment – from small electric motors to large industrial fans and turbines. Support for one and dual-plane balancing covers all typical tasks.
    Real Application Results
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    A user achieved vibration reduction from 0.74 mm/s to 0.014 mm/s – a 50-fold improvement. This demonstrates the remarkable accuracy of the device even on small rotors.
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    Engineers successfully balanced radial fans, achieving decreased energy consumption, removed excessive noise, and extended equipment lifespan. Energy savings recovered the device cost within several months.
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    Cost and Delivery Terms
    Current Prices

    Complete Balanset-1A Kit: €1,751
    OEM Kit (without case, stand, and scales): €1,561
    Special Offer: €50 discount for newsletter subscribers
    Bulk Discounts: up to 15% for orders of 4+ units

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    eBay: trusted sellers with 100% rating
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    Payment Methods: PayPal, bank cards, bank transfer
    Shipping: 10-20 business days by international mail
    Shipping Cost: from $10 (economy) to $95 (express)
    Warranty: manufacturer’s warranty
    Technical Support: included in price

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    Full balancing system

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    Basic Kit:

    USB coupling module (1 pc.) – ensures measurement control between measurement system and PC.
    Accelerometers (2 pcs.) – Sensitivity: 100 mV/g. Frequency range: 0.5-10,000 Hz. Attachment: adhesive mounting.

    Accelerometer with magnetic base

    Optical tachometer (1 pc.) – Distance: up to 1.5 m. Contactless operation for operator protection.

    Optical speed measurement device

    Holder for phase sensor (1 pc.) – Pull force: 60 kgf. Variable angles for accurate readings.

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    Digital scales up to 500 g (1 pc.) – Accuracy: 0.01 g. Required for correct weight calculation.
    Software Balanset-1A – Easy-to-use design. PC-based. Multiple language support.

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    Protective case (1 pc.) – Heavy-duty build. Cushioned interior for equipment protection.
    Technical documentation – Full documentation. Practical examples.
    Connection cables – Reliable interference-free connections.

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    ? Mobility – Easy transportation allows field operations without dismantling.
    ? Versatility – Works with all kinds rotors from small fans to heavy rotors.
    ? User Convenience – Clear controls bypasses special training.
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    Economic Effect:
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    ? Service Life Increase by 50-200% – properly maintained rotors requires less maintenance.
    ? Energy Consumption Reduction by 5-15% – reduced friction consume less power.
    ? Quick Payback – from 3 to 12 months depending on application frequency.

    Support
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    Metrological Support – periodic verification to guarantee reliability.
    Temporary Use – suitable for short-term needs. Daily lease terms available.
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    Balanset-1A OEM Version: €1,561.00
    Additional Vibration Sensor: €90.00
    Optical Sensor (Laser Tachometer): €124.00
    Magnetic Stand 60 kgf: €46.00
    Reflective Tape: €10.00
    Professional balancing equipment
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    Conclusion

    CGMiner persists as one of the top choices for dedicated digital currency mining, offering the stability and efficiency needed for successful mining operations.

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