Bitcoin Miners Struggle As Corporate Hoarding Dries Up Fee Revenue — Nearly 1 Million BTC Now Locked In Treasuries, Undermining Network Economics
Snapshot:
- With network hashrates hitting all-time highs and transaction fee income sinking, Bitcoin miners are being squeezed from both ends.
- A growing share of BTC is now sitting idle in ETFs and corporate balance sheets, creating a liquidity drought that threatens the long-term sustainability of Bitcoin’s miner-enabled economy.
Bitcoin (CRYPTO: BTC) miners are discovering an uncomfortable truth: more work doesn’t necessarily mean more reward. Network difficulty – the metric that governs how hard it is to unlock new coins – has hit fresh highs, just as activity on the blockchain slows to a crawl. The result is a system running at full tilt that offers its key stakeholders less and less.
The economics are deteriorating. Jefferies estimates that miner profitability slipped by around 5% between July and September. Transaction-fee income, once a decent supplement to block rewards, has fallen below $500,000 a day. With Bitcoin’s price retreating from its mid-August highs and electricity costs rising at twice the pace of consumer inflation, margins are being eroded from both ends. What was once a feverish marketplace now resembles a half-abandoned factory: the machinery still hums, but commerce is thin.
More hash, less cash
Rising hashrates normally point to rising network security. They can also signal desperation. Miners have sunk vast sums into specialized ASICS hardware, much of it financed with debt. Investors expect the machines to keep humming, but as hashrates surge, so does competition for …
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