Puell Multiple drops as miner revenues hit 10-month low
The post Puell Multiple drops as miner revenues hit 10-month low appeared on BitcoinEthereumNews.com.
Miner revenues serve as a barometer for the overall state of the Bitcoin ecosystem, reflecting the delicate balance between mining costs, Bitcoin price, and network difficulty. Since Apr. 24, miner revenue has consistently been below its 365-day simple moving average (SMA), with only two brief exceptions in early June. This prolonged period of below-average revenue culminated on Aug. 7, when miner revenue plummeted to its lowest level since September 2023. While this sustained downturn can be attributed to several factors, last week’s drop resulted from a significant drop in Bitcoin’s price. Graph comparing the total Bitcoin miner revenue to its yearly average from Aug. 15, 2023, to Aug. 12, 2024 (Source: Glassnode) Bitcoin saw significant volatility in August, dropping from $65,360 at the beginning of the month to below $50,000 on Aug. 5 before partially recovering to $54,000 within 24 hours. Significant price fluctuations like this directly impact miner revenue, as the USD value of each mined Bitcoin decreases with the price. Bitcoin mining difficulty has also been increasing this month, requiring more computational power to mine each Bitcoin and further squeezing profit margins. Graph showing Bitcoin’s mining difficulty from Aug. 15, 2023, to Aug. 12, 2024 (Source: Glassnode) This short-term volatility is part of a long-term trend that began with Bitcoin’s halving in April. The halving reduced the block reward from 6.25 BTC to 3.125 BTC, halving the number of new Bitcoins entering circulation. This structural change has impacted miner revenues and profitability, forcing the industry to adapt to a new economic reality while juggling short-term volatility. To better understand the implications of these changes, we can turn to the Puell Multiple, a valuable metric for assessing miner profitability and market conditions. The Puell Multiple is calculated by dividing the daily issuance value of bitcoins (in USD) by the…
Filed under: News - @ August 14, 2024 6:22 am