Despite a particularly shaky month, new research suggests that bitcoin miners pulled in a hefty amount of revenue in May – the month of the highly-anticipated third halving.
The Halving Didn’t Affect Bitcoin Earnings Much
May really had everyone up in arms over the halving. The event had people excited just as much as it had them worried. Crypto analysts went back and forth about what would happen following the halving. Crypto would go up very quickly; it would come down with a thundering crash. Nothing would happen; everything would happen. They seemed incapable of making up their minds, and many, up until the day it occurred, really didn’t know what to expect.
For the most part, the halving proved to be rather uneventful. While the currency did drop in price a bit following the event, this lasted only about a week. For the most part, those losses have been recuperated and then some. Bitcoin is now trading for just under $9,800 at the time of writing – about $1,000 higher than where it was when the halving occurred.
To be fair, much of the action took place in the leadup to the halving rather than during or after the event. Bitcoin rose from the low $8,000 range – where it had been hovering for a few weeks – into the high $9,000 range. BTC even broke the $10K mark very briefly (this only lasted for a few hours).
From there, users have just watched bitcoin repeat much of the same behavior it’s exhibited over the past few months.
The halving is an event that seeks to make bitcoin rarer and reduce bitcoin block mining rewards. This was the third time this has happened. The first time occurred in 2012. Bitcoin mining rewards were dropped from about 50 BTC to 25 BTC. While these numbers may sound huge now, bear in mind that bitcoin and cryptocurrencies were not trading at the prices they’re currently exhibiting.
The second event occurred in 2016. 25 BTC was reduced to about 12.5 BTC. This event didn’t result in much at first. The major results of the halving occurred about a year and a half later. By December of 2017, bitcoin had reached its all-time high of roughly $20K – a massive spike from the already impressive $1,000 it was witnessing at the end of 2016.
Only a Slight Drop
This May, despite the halving, bitcoin mining revenue only fell about 11 percent from the previous April, where bitcoin mining revenue stood at just over $412 million. In May, that figure fell to only $366 million, meaning that while miners did, in fact, take a financial hit, it didn’t amount to much.
However, this figure is based on the idea of miners potentially selling their earnings right away following the extraction of new blocks. It could very well be that miners are now saving much of what they mine, believing that as bitcoin becomes rarer, its price will expand in the coming years.