Bitcoin Mining Fees Account for Less Than 1% of Revenue, Pressuring Older Rigs
Summary
- According to on-chain analysis, the share of fees in Bitcoin mining revenue averaged 0.64% over the past 30 days, remaining below 1%.
- Based on electricity costs of $0.05 per kilowatt-hour, mining one Bitcoin with the Antminer S19 would require about $86,700 in electricity, more than the current Bitcoin price.
- By contrast, the Antminer S21 was estimated to have an electricity cost of about $44,300 per Bitcoin, giving it greater profitability potential than older machines, while further price gains or lower costs are still needed.
Forecast Trend Report by Period
Bitcoin’s recent rebound has not lifted the share of transaction fees in mining revenue above 1%, leaving profitability under pressure for older mining equipment, an analysis found.
In a newsletter published on Oct. 12, on-chain analyst Axel Adler Jr. wrote that over the past 30 days, transaction fees contributed an average of just 64 cents out of every $100 in daily Bitcoin miner revenue.
Fees made up 0.64% of average mining revenue over the past 30 days, little changed from 0.65% a week earlier. The metric has remained below 1% since mid-August last year. Because most miner revenue comes from newly issued Bitcoin, mining profitability depends heavily on the token’s price and the efficiency of mining hardware.
Adler said mining conditions have improved as Bitcoin climbed from $59,000 to about $84,000, but older machines continue to face heavy pressure.
Assuming electricity costs of $0.05 per kilowatt-hour, the power cost to mine one Bitcoin with Bitmain’s Antminer S19 is estimated at about $86,700. That is above Bitcoin’s current price.
By contrast, the electricity cost per Bitcoin for the newer Antminer S21 was estimated at about $44,300. Even excluding equipment purchases, cooling and maintenance costs, it offers greater profit potential than the S19.
“Bitcoin’s price gains have improved conditions for miners, but older machines still struggle to remain profitable at current power costs,” Adler wrote. “Further price increases or lower costs are needed.”
He added that a fee share below 1% alone does not necessarily mean miners are shutting down equipment or selling their Bitcoin holdings. Actual profitability varies depending on machine efficiency, electricity costs and maintenance expenses.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.