It was a devastating month of May for the cryptocurrency market with a quick succession of events that led to massive sell-offs in Bitcoin and altcoins. The market capitalization dropped to as low as $1.2 trillion from a peak of $2.5 trillion and Bitcoin miners were not spared either, as they witnessed a 15% drop in earnings.
Data collated by BTC PEERS indicates that Bitcoin miners earned at least $1.45 billion in May. This value represents a drop of 15.01% from April’s earnings of $1.7 billion. Taking into consideration Bitcoin’s price correction by over 50% from its All Time-High (ATH), the drop in mining revenue does not come as a surprise.
Looking at Bitcoin’s daily mining revenue over the past three months, the highest daily value was on April 15th, when figures climbed to $77 million. The lowest daily return was recorded on May 29th at $26 million.
Bitcoin’s energy usage debates and mining ban last month caused a lot of problems for the leading cryptocurrency in form of a price correction. It began with critics focusing on the digital asset’s energy consumption rate. Tesla’s CEO Elon Musk shared concerns about Bitcoin’s carbon footprint to the world and announced that his electric car manufacturing company would no longer accept the cryptocurrency for payments because of environmental concerns. This caused the leading cryptocurrency to crash from its ATH to below $50,000. Following this decision, rumors also spread that his firm may be dumping its Bitcoin holdings, spreading more fear and doubt in the market. Musk has however refuted claims suggesting that Tesla will sell its Bitcoin.
The market condition was further worsened as news of China banning Bitcoin mining and trading hit the market. The Asian country accounts for a significant percentage of global Bitcoin mining activities. This caused the price of bitcoin to trade as low as $30,000 on May 19th.
Historically, investors usually panic-sell their digital assets in a bear market. On-chain analytics shows that short-term investors sold their BTC holdings at a loss following the China news. A drop in Bitcoin’s price also translates to a loss of interest in trading the asset, thus, leading to fewer transactions to confirm which ultimately caused the Bitcoin mining earnings to drop.
Bitcoin is currently trading $38,500, up 1.45% in the last 24 hours.