For the first time in almost a year, revenues for Bitcoin (BTC) miners surpassed those of Ethereum (ETH) in June. But even then, both digital assets have shown dwindling profit margins owing to the prevailing crypto winter.
According to a July 5 report by Binance, last month, Bitcoin miners generated $656.47 million.
Meanwhile, Ethereum miners brought in $548.58 million over the same period, over $100 million less than their BTC counterparties. This flipping was significant because, other than not happening in about a year, Ethereum miners were ahead of Bitcoin miners by about $100 million a month earlier. Even more, this margin was even larger in the months preceding May.
Bitcoin miners yield more than Ethereum
Based on the report, there has been a “closing gap” between the two crypto mining revenues in the past couple of months. Ethereum, which once led in terms of profitability, has been barely retaining its position as BTC miners’ revenues neared their levels. Then came June, where amidst all the uncertainty and pressures in the crypto market, Bitcoin mining became more rewarding than Ether.
But even then, miners of both digital assets have been between a rock and a hard place in recent times. Their yield is directly proportional to the prices of the cryptocurrencies they mine. This means that their income has been slashed considerably in the face of the prevailing market downturn.
To put this into context, mining a single Bitcoin block gives the miner 6.25 BTC. During Bitcoin’s November all-time high of $69K, this was equivalent to $431,250.
The figure is now down 60% to just $120,000 now that BTC trades around $20K. Miners takings are now at a two-year-low since Bitcoin traded at this price last in December 2020. Ethereum miners have suffered a similar fate as ETH fell to about $1,100. Binance noted:
“Due to the decline in price across the market, the returns from mining activities, although the same coin volume-wise, have declined significantly dollar-wise.”
Due to the decline in earnings, miners have been forced to either sell their machines and outputs or seek alternative income sources. Several have sought solace in traditional finance, namely the debt and equity markets.
On top of these issues, miners in Washington have higher power bills, while those in Kazakhstan are taxed. Those in New York are now forced to resort to “go green or go home.”