According to Glassnode's data, Bitcoin (BTC) miners generated $ 4 million in revenue in less than an hour as of February 12. Thus, the highest hourly income level in history was reached.
In May 2020, Bitcoin halved its block reward for the third time in its history, and the amount of new Bitcoin acquired at the end of mining was halved.
After the block reward halving, the amount of new BTC produced by BTC miners using the computing power they gain from their hardware is reduced by half. Thus, miner income decreases by 50 percent after the "halving" period, which can cause difficulties in mining activities in the short term.
On the other hand, the hash rate of the Bitcoin network has also reached all-time highs, with the fourth consecutive increasing difficulty adjustment expected to be roughly 2.5 percent within seven days.
So why are Bitcoin miner revenues rising?
Block reward halving occurs every four years to lower the release rate of the remaining Bitcoin supply.
As Bitcoin approaches its fixed supply of 21 million, the new BTC issuance rate is reduced by half. However, the halving may be insufficient for miners to mine BTC to cover their costs in the short term.
Theoretically, when a halving occurs, the Bitcoin price is expected to rise as new supply. Therefore, the higher Bitcoin price becomes to cover the costs of the BTC miner that produces less.
This week, Bitcoin miners earned the largest hourly income in history, despite mining half as much BTC last year.
It shows that after the block reward halving, Bitcoin's appreciation is working as planned, encouraging miners to increase hash rates and invest in the security of the network.
Another reason for the increased miner income is the increased number of transactions on the network and transaction fees paid to miners. According to Clarkmoody's data, 13.5 percent of the miner's income consists of transaction fees.
Will miner income continue to increase with the bitcoin price?
PlanB, developer of the popular price prediction model stock flow (Stock to Flow, S2F) said Bitcoin is on track to reach $ 288,000.
The S2F model relies heavily on BTC's supply (stock) and new Bitcoins mined (flow). It predicts the course of the price due to the shortage of BTC.
If the BTC price approaches $ 60,000, the market value of the cryptocurrency will reach $ 1 trillion. Analysts say it could be a big trouble expecting Bitcoin around $ 56,000. Therefore, the probability of BTC going from $ 53,000 to $ 56,000 in the first half of 2021 is still high.
