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It finally broke its previous all-time high last week, hitting $69,000 before falling slightly. The price rise has led to a surge in transaction volume on the network, and miners are making money from the increased activity.
The seven-day moving average of Bitcoin network trading volume has reached its highest level since September 2022, 18 months ago, according to data from The Block.
This increased trading volume has led to an increase in Bitcoin miner profits. The 7-day moving average of miner revenue is currently at $65.4 million, just shy of the all-time high of $67.2 million reached in May 2021.
While the price surge has been attributed to the success of spot Bitcoin ETFs in the US, another event to watch is the Bitcoin halving, when rewards to miners are cut in half. Traditionally, the halving, which is expected to occur in about 40 days, around April 19, has been seen as a bullish event for the price of Bitcoin.
Last month, Bitcoin also reached its highest level of mining difficulty ever. This means that the computational cost of mining a Bitcoin block has more than doubled over the past 12 months. However, after halving, difficulty may decrease as less efficient miners leave the network, and their machines can no longer run profitably due to lower rewards.
Mining companies are spending huge amounts of money.
The Bitcoin price recovery has prompted mining companies to spend more than $1 billion on new equipment since February 2023, according to a Bloomberg report citing public data. Bloomberg also noted that miners were pumping out energy at a record pace last month, about 33% more than in the same period last year.
The challenge of Bitcoin mining is not only purchasing machines, but also finding a source of electricity that is cheap and reliable enough to compete with other mining providers. Texas has been a popular destination for Bitcoin miners in recent years, but companies elsewhere, particularly Chinese companies, are investing in places like Ethiopia.
According to Bloomberg, mining companies CleanSpark and Riot have each spent more than $400 million on new machinery, and a source cited in the report said the unnamed company is buying “$350 million or $400 million” worth of mining machines. , but “there’s nowhere to put it,” he said. them.”
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