In recent months, the profitability of bitcoin mining has declined in comparison to that of Ethereum. For nearly a year, Ethereum miners had consistently outperformed bitcoin. That is, until now, when the profits from bitcoin mining have retaken the lead.
Data suggests that bitcoin miners are rebounding faster than their ETH counterparts. This was evident in the recent shrinking gap, as Ethereum miners had barely managed to stay ahead. This would continue until June, an uncertain month for all cryptocurrency investors, and the profitability of ETH mining has suffered as a result of the price decrease.
The total amount created by bitcoin miners last month was R10.7 billion, while Ethereum generated R9 billion within the same time period. This demonstrates that Bitcoin miners outperformed Ethereum miners by more than R1.6 billion in June.
This was a stunning result given that Ethereum revenues had actually been R1.6 billion ahead of bitcoin the previous month, and greater margins had been recorded for months before that. As a result, the change has turned mining profitability expectations on their heads.
Although bitcoin topped Ethereum in terms of monthly mining revenue in June, the data for both digital assets point to a greater issue. Because of the market’s reduction in price, the returns from mining activities, while the same coin volume-wise, have decreased dramatically dollar-wise.
The maximum reward for mining a single bitcoin block was 6.25 BTC at its peak. At a price of R1.1 million per BTC, this amounted to around R7 million. Currently, mining a single bitcoin block would net the miner roughly R1.9 million, marking a more than 60% decline in profitability.
As a result, miner revenues have dropped to their lowest level in nearly two years. Figures were thus low in December of 2020, just before the spectacular bull runs of 2021.
Ethereum was not spared and experienced the same fate. According to data, the last time the altcoin returned such low mining income was in December of 2020. This demonstrates that, whereas digital assets compete aggressively for mining money, their development and decrease continue to follow similar trends.