The mining industry of bitcoin has suffered a serious setback in 2022. Considering factors such as massive price correction, inflation, etc., many miners have also exited the bitcoin network. Why? Well, mainly to make ends meet.
Now, many people have raised questions about the profitability of this industry. But, where is the answer?
wish some relief
According to The Blox Research, bitcoin miners generated more than $15 billion in revenue during 2021. This highlighted a year-over-year increase of 206%, a staggering number to say the least. However, 2022 has not been kind. That being said, struggling miners may have something to look forward to in a (slow) market correction.
The difficulty of bitcoin mining has been adjusting for some time. Mining difficulty is following roughly the same trend, with the hash rate falling as more miners go offline due to declining profitability.
The falling difficulty level (27.69 t at press time) can be seen in the graph below.
But, is there anything different this time? Well, for starters, the said drop coincided with some correction across the market. At the time of writing, bitcoin price remained above the $23.7k-mark. i.e. more cash flow on each bitcoin mined for the respective BTC miners. In fact, a sign of some relief.
Following the same, an increase in the BTC balance of miners may portend a promising scenario. Here it is exactly the same. Despite the current crypto-chaos, the balance of BTC miners hit a 4-year high.
The graph of Glassnode attached here also seems to support the statement.
Overall, the companies that mined the first cryptocurrency held 1,845,303 BTC, which is ~9.6% of the current supply of BTC.
sunshine + rain
While these developments anticipate a steady uplift, the miners are not completely out of the woods yet. In fact, at the time of writing, total miner revenue has continued to decline.
Nevertheless, if bitcoin continues to recover and the difficulty subsides, miners can continue their operations until the next bull run appears. Until then, BTC holders need to show their support despite everything, as it still is.
Here, it is worth noting that the number of wallets with a balance of 10,000+ BTC is increased Important since the beginning of the month.