Bitcoin Mining in May: Assessment of the State of Miners After the Halving
Reporter
- Bitcoin’s hashrate showed resilience while BTC struggled to reach $70,000.
- European regulators’ response focuses on potential market abuse risk related to MEV.
The fourth Bitcoin is different from previous years. [BTC] The block subsidy halving was quite different. The block subsidy reward for miners was reduced from 6.25 BTC to 3.125 BTC. However, they continue to earn transaction fees for each block.
Bitcoin’s hashrate fell in previous halvings due to insufficient transaction fee reward. This time, the hashrate was near its all-time high, rising from 630 EH/s to 640 EH/s after the halving.
However, as of the date of this article, it had fallen to 602 EH/s.
Source: Glassnode
Bitcoin price is also struggling to reach the $70,000 mark, even though its hash rate is proving resilient.
What do metrics say about Bitcoin mining
On-chain data from The Block shows that the Bitcoin hash rate is decreasing. This could indicate a potential risk to the network. Miners might struggle to make a profit in such situations.
Source: The Block
Glassnode’s data on miners’ block revenue has confirmed this. According to the latest on-chain data update, miners’ revenue has dropped dramatically, from 525 BTC in May to 384,375 BTC.
Source: Glassnode
As a recent livestream from InvestAnswers showed, some still see this as a positive outcome for Bitcoin.
It’s good that the price of Bitcoin is going up. That’s what usually gets miners to start mining Bitcoin.
Bitcoin mining difficulty data shows how hard it is to find the right hash for each block. Note that difficulty does not affect BTC price. BTC prices are important in determining miners’ profitability.
What’s the problem with MEVs?
Block rewards are not all miners can earn. Maximum extractable value (MEV), also known as potential profit, is the amount of money miners could earn through strategies like frontrunning, sandwich attacks, etc. They rely on the ability to rearrange blocks of transactions.
The European Securities and Markets Authority recently announced its intention to restrict the use of MEV by miners and validators, citing potential market abuse.
As the proposal is in draft stage, stakeholders can comment until the end of June. It could have a significant impact on validators and miners worldwide if approved.
