Bitcoin [BTC] miners weathered the crypto-winter for well over a year. However, it now seems that the tides have turned after mining revenue increased after plummeting to a 19-month low, according to a recent report by Diar Research, published on March 4.
In February, the total revenue of Bitcoin miners was just under $195 million, a 10% drop since January when mining income was $210 million. It also marked the industry’s lowest revenue since August 2017.
In comparison, December 2018 saw fees alone bring miners over $295 million. This was followed by the collective market capitalization falling from a high of $146 billion to under $120 billion, resulting in a fall of mining revenue.
There was an increase in the competition within the Bitcoin mining community since the “crypto-boom” began at the end of 2017. Since then, the income in terms of gross margins saw a free-fall from 94% at the beginning of the previous year to 32% in December 2018. After holding steady in January, the gross margin shot up to 39% in February.
Diar pointed out that miners will increase their equipment purchases in order to keep up the increasing momentum. They stated,
“With gross margins now having a little more breathing room, it is likely that mining operations will increase capital expenditure on the latest mining equipment in order to stay ahead.”
Bitmain’s latest flagship miner, the S15, has been selling out since the beginning of 2019, a testament to the above statement.
The report added,
“It is likely then that hash power continues to increase in the coming months bar a massive price drop. But at current Bitcoin prices, the capital requirements would still be to miners benefit with the S15 averaging 84% more return than it’s predecessor, the S9.”
Many Chinese miners were selling their equipment by the kilo to salvage some funds, as the coin market crashed to $100 billion during the crypto-winter beginning in November, 2018.
With the Bitcoin halving approaching in May 2020, Bitcoin miners in China have been bullish about the cryptocurrency and have begun increasing their ASIC equipment holdings. Given past trends in 2012 and 2016, the price of the top cryptocurrency spikes a year prior to the halving, ushering a bull run. The miners expect yet another price boom and are increasing their equipment hold to capitalize on the same.
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