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Earnings For Bitcoin Miners Hit 10-Year Low

The amount of money earned from mining Bitcoin (CRYPTO: $BTC) has fallen to a 10-year low.

Data from onchain analytics platform Glassnode shows that fees as a proportion of miner revenue are at their lowest level since 2016 after falling to 0.52%.

Cryptocurrency miners, who produce new tokens by completing complex mathematical problems using banks of high-powered computers, face pressure as BTC’s price declines.

Rising electricity costs in much of the world are also hurting Bitcoin mining profits and forcing smaller players out of the market, according to Glassnode.

Fees from minting new Bitcoin now comprise less than 1% of most miner’s revenue.

In a social media post, Glassnode said that “Bitcoin was below $400 the last time fee share was this low.”

The situation has led many Bitcoin miners such as Riot Platforms (NASDAQ: $RIOT) and Hut 8 (NASDAQ: $HUT) to pivot to operating artificial intelligence (A.I.) data centres.

Miners continue to struggle with Bitcoin’s price having been effectively cut in half since hitting an all-time high of $126,000 U.S. last October, squeezing profit margins.

Data from onchain analytics firm Checkonchain puts the average cost of producing one Bitcoin at $78,254 U.S. as of Aug. 11, which is 23% above the current spot price of BTC.

Bitcoin is trading at $63,850 U.S. on Aug. 12.