Bitcoin miners’ earnings fall to annual lows: Will they capitulate?

Bitcoin miners are starting to feel the adverse effects of the latest halving, with industry revenue at its lowest point since early 2023.

The tighter profit margins raise questions about which companies in the industry can stay afloat during the upcoming Bitcoin halving era, as well as how the market price of Bitcoin could be affected.

Sharp decrease in miners’ income

According to data shared by on-chain analytics platform CryptoQuant, Bitcoin’s “Puell Multiple” plummeted immediately after the April 19-April 20 halving.

The Puell multiple is a ratio that compares the value of BTC’s daily issuance in dollar terms to the 365-day moving average of that same metric. As the number of new BTC issued to miners has dropped from 6.25 BTC per block to 3.125 BTC per block, the Puell multiple has decreased.

Glassnode Academy states that a high Puell multiple indicates relatively high miner profitability, meaning miners are more incentivized to liquidate their coins. Conversely, a low multiple means that less competitive miners are forced to shut down their rigs, making the remaining miners more profitable and allowing them to sell fewer coins to cover their operations.

On April 28, the multiple stood at just 0.73, well below its 365-day simple moving average of 1.43. In terms of dollars, the daily earnings of miners

“Now they have two options: 1. Capitulate, or 2. Wait for a rise in the price of $BTC,” he wrote CryptoQuant CEO Ki Young Ju on Twitter on Tuesday. “At the moment there are no signs of capitulation.”

CryptoQuant’s mining dashboard shows that BTC flows from miners to OTC tables and exchanges remain relatively low, which means they are not interested in selling their BTC.

The impact of debris

Although miners’ earnings are now more suppressed, halving day was an unusually profitable day for miners, bringing in $106 million in revenue compared to $68 million the previous day previous ones

The temporary increase in profits was largely thanks to the simultaneous launch of Runes, a new protocol standard for minting tokens in Bitcoin developed by Ordinals creator Casey Rordamor.

In a frenzy to mint new tokens. Runes users raised Bitcoin network fees to over $100 per transaction, allowing miners to amass multiple blocks with over 30 BTC in fee income. Since then, fees have dropped to normal levels and miners’ earnings have declined to $28.5 million per day.

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