Bitcoin mining businesses hit their highest monthly revenue in March recording over $2 billion in block rewards and transaction fees.
This cancels the previous highest earning month which was $1.74 billion in May 2021.
According to Bitcoin Magazine, of the $2 billion earned last month, around $85 million came from transaction fees while the remaining $1.93 billion was from block subsidy. Miners receive compensation for both validating transactions and minting new bitcoins.
Higher network activity and increasing Bitcoin prices were the key catalysts to the bumper earnings of Bitcoin miners last month. The upcoming halving event prompted pro-active measures by miners to maximize value before profits fall.
The leading US mining pool, Foundry, captured 29.4% of all blocks mined in March. Chinese pool AntPool took second place with 22.4% of blocks. The two companies were responsible for over half the monthly Bitcoin supply.
Despite the bumper earnings of bitcoin miners last month. There is still a supply deficit in the sector as the demand for bitcoin by top financial bodies increases.
For instance, Exchange traded funds bought roughly 66,000 Bitcoins in March while Miners only minted around 25,000.
This widening supply-demand imbalance and halving-related scarcity could spur greater competition to secure Bitcoin. The resulting competition to mint more bitcoins would sieve off poor Bitcoin miners leading to more market consolidation by capable mining businesses.
Miners face tough times ahead with the upcoming halving event which will affect profits unless bitcoin prices increase to cushion the blow.
What to Know
- The block subsidy, paid out for each block mined, is currently 6.25 bitcoins. But it will drop to 3.125 bitcoins after the upcoming halving event in April.
- The Forray of global financial giants like Blackrock into securing Bitcoin ETFs has helped boost the demand for bitcoin thereby increasing the profits of bitcoin miners.