Miners are rewarded with transaction fees, and if less people use Bitcoin, then miners earn less as well.
Bitcoin mining isn’t getting any easier — despite the price of BTC sitting comfortably above the $100,000 mark.
Data from Luxor’s Hashrate Index shows that transaction fees in June so far have fallen to less than 1% of total block rewards for miners — the lowest since 2022, meaning the operations in the industry are earning less for their work. The dip was first reported by TheMinerMag.
While the month is not yet complete, the downward trend suggests that the situation isn’t getting better for miners.
Bitcoin miners are rewarded by processing blocks — which contain transaction data — and adding them to the blockchain. Per block processed, miners receive 3.125 BTC (worth more than $327,000 at the current price) along with transaction fees.
But as fewer people use the Bitcoin network, transaction fees remain low, meaning that miners earn less for each successful block win.
The average cost to make a Bitcoin transaction currently stands at $1.45, according to BitInfoCharts. Transaction costs have typically remained low this year and last — below $1.50 — only occasionally spiking thanks to a flurry of activity on the network with crazes like Bitcoin Ordinals, the blockchain’s answer to NFTs, taking up transaction space.
Miners, typically industrial operations of warehouses full of specialized computers, were hit hard earlier this year by the declining price of Bitcoin, and in some cases were forced to sell more coins to keep their businesses running.
Things appeared to be getting better as Bitcoin’s price rose again in recent months, but blockchain data shows that as of late, blocks processed contain small amounts of transactions. It’s been flagged as problematic by Square CEO and payments entrepreneur Jack Dorsey, a die-hard Bitcoin maxi, who believes BTC should be used more broadly for everyday payments — not just as a store of value.
Bitcoin was recently trading for $104648, crypto data provider CoinGecko shows, after dropping by nearly 4% over a 24-hour period. The coin has recovered substantially since dropping below $75,000 in April — a dip apparently caused by President Trump’s tariff announcements.
But the rising price of the asset is still not enough to ease the concerns of miners, according to CJ Burnett, Compass Mining’s chief revenue officer. “Despite Bitcoin’s price gains, mining revenues have remained near all-time lows since the 2024 halving,” he told Decrypt.
The halving is a quadrennial event baked into Bitcoin’s code. Every four years, mining rewards are cut in half. The last halving took place in April 2024, slashing rewards from 6.25 BTC.
Typically, the price of Bitcoin tends to soar one year to 18 months following the halving, though Decrypt previously reported that the coin is lagging compared to previous cycles.
Still, miners told Decrypt that BTC’s price shouldn’t be an issue if they’re running lean, efficient operations. Burnett added that miners could survive difficult times with “the most efficient mining hardware and competitive power costs.”
And Mihir Bhangley, co-founder and partner at Sangha Renewables, a company that turns renewable energy into Bitcoin mining operations, added that volatile BTC price movements are all part of the game.
“Bitcoin mining profitability has always hinged more on cost structure than Bitcoin’s price,” he said, adding that investing in the best hardware “ensures long-term, resilient returns, regardless of market cycles” for miners.
