June Saw Profits for Crypto Miners Take Heavy Dips

by
Nick Marinoff
My articles My books
Follow on:

The month of June marked a turning point for the world of crypto and bitcoin mining, and it looks like revenue for miners has begun to slip.

Crypto Miners Are Losing Out On Funds

Both bitcoin and Ethereum miners reported a drop in earnings throughout June 2021. Profits fell by as much as 42 percent from May, which saw those involved in extracting new units garner a whopping $1.45 billion in crypto-based profit. By contrast, June only produced $839 million in profit for miners.

In addition, the hash rate of bitcoin has fallen by approximately 50 percent, marking the lowest level for the world’s number one digital currency in approximately one year.

Last month saw bitcoin and its primary competitor Ethereum in a tough spot. For one thing, both assets saw their prices struggling just to remain steady following heavy drops that occurred during the previous weeks. Bitcoin, for example, was trading at a new all-time high of $64,000 per unit in mid-April, though by late June, the currency had briefly fallen below the $30,000 line.

Ethereum was put in a similar position, having at one point reached a new peak of approximately $4,000. Now, however, the currency is trading for just over $2,500.

But aside from these massive price drops, it could also be argued that miners are seeing their profits dip because of all the negative hype they and their projects are getting as of late. During the past few months, the topic of bitcoin and cryptocurrency mining has been a hot one, though not all the press the space has been getting is positive. For example, several reports have emerged condemning the practice of crypto mining due to the alleged environmental hazards it presents.

It is widely stated that bitcoin mining now has as large a carbon footprint as the city of Las Vegas, Nevada. In addition, there are several studies suggesting that bitcoin mining requires more energy than various countries such as Iceland and Argentina.

However, the biggest attacks regarding crypto mining have come by way of institutional investors who at one point were prominent figures in the digital currency space. Elon Musk, for example, has always been a major bitcoin bull who even purchased more than $1 billion worth of the asset last February, though he has since let his feelings on the mining space be known. Worried about the hazards it allegedly causes, he will not allow any bitcoin-based purchases for Tesla goods and services to occur.

Institutional Investors Take Jabs at the Mining Process

Another major “attack” stems from Kevin O’Leary of “Shark Tank” fame. Recently, O’Leary stated that he would not be purchasing any more bitcoin mined in China given that the country does not employ environmentally friendly methods of extracting new units.

Comments like these may have led to a lack of trust in bitcoin mining and negatively impacted the revenue of miners.