According to recent research, important on-chain statistics such as Bitcoin mining revenues have returned to pre-halving levels.
Data from analytics provider Glassnode suggests that Bitcoin mining revenues are now back to the same level as when the block rewards were double what they are today.
When the halving happened in mid-May, BTC prices were around $ 9,000. By November 18, they had doubled to $ 18,000, indicating a correlation, as miners have to sell enough of the assets to cover their expenses while remaining profitable. Higher prices mean more profit.
#Bitcoin miner income is back to pre-halving levels.
– glassnode (@glassnode) November 18, 2020
Blockchain.com, which tracks the total value of coinbase block rewards and transaction fees paid to miners confirms the findings.
Daily sales, including block rewards and transaction fees, were $ 21.2 million for November 18, the highest in a year. The previous peak was on May 6 when it hit $ 20.6 million. After the half-life event, where block rewards dropped from 12.5 BTC to 6.25 BTC, sales plummeted to just over $ 7 million per day.
Mining revenues experienced an earlier slump on March 18 this year after the pandemic-induced crypto market crash that wiped out 45% of Bitcoin’s price in less than a week. When mining revenues fall sharply, over-indebted miners can begin to capitulate due to unfavorable market conditions.
The opposite seems to be happening right now as prices approach their all-time high.
Another factor indicating that the network is healthy and that miners are happy is the hash rate, which is now only 10% from its highest level ever.
According to the end of the rainy season in China, where most of Bitcoin mining takes place, oil rigs were shut down in preparation for relocation when cheap hydropower dried up. This resulted in a 37% seasonal decline to less than 98 Exahashes per second.
The current mining earnings figures and hash rate recovery bodes well for the continuation of the bull market, which may bring Bitcoin prices to new all-time highs before the end of the year.