Bitcoin Miner Revenues Decline 22% in Q2, According to H.C. Wainwright

Since reaching a record high of $73,777 in mid-March, Bitcoin has entered a consolidation phase characterized by rangebound trading. This stagnation has decreased market enthusiasm; however, historical patterns and current indicators point toward an impending breakout, as noted in a recent research report by H.C. Wainwright.

Throughout a significant portion of Q2 2024, Bitcoin traded within a limited range, concluding the quarter about 10% lower than the levels seen in Q1. The reported decline is attributed to miner capitulation due to post-halving economics, substantial liquidations by the German government, concerns surrounding Mt. Gox repayments, and a hawkish stance from the Federal Reserve.

Despite these challenges, U.S. spot Bitcoin exchange-traded funds (ETFs) attracted approximately $2.4 billion in net inflows during the quarter, a decrease from the $12 billion seen in Q1. The average Bitcoin price for Q2 was $65,687, reflecting a 22.6% quarter-over-quarter increase from the $53,579 average in Q1. As of Q3, Bitcoin has averaged $61,025, which is a 7.1% decline from Q2, mainly due to significant liquidations of seized Bitcoin by the German government that were completed by mid-July.

After a challenging start to Q3, Bitcoin prices surged past $68,000, fueled by renewed ETF inflows and positive momentum surrounding pro-crypto presidential candidate Donald Trump’s increasing election prospects. In the first three weeks of Q3, U.S. spot ETF inflows already surpassed total net flows from the entirety of Q2, reaching over $2.5 billion by July 19.

H.C. Wainwright anticipates that Bitcoin will continue its range-bound price action in the third quarter before revisiting recent highs and achieving new all-time highs in Q4.

“BTC production dropped substantially following the halving, as anticipated,” H.C. Wainwright remarked. Total transaction fees awarded to miners climbed by 16.4% to 6,804 Bitcoin in Q2, making up 12% of total block rewards, an increase from 7% in Q1. Two specific events—launching the Runes protocol and a glitch in OKX’s fee algorithm—caused temporary spikes in transaction fees, resulting in over 2,000 Bitcoin worth of transaction fees for the quarter.

In contrast, total miner revenues fell by 22% quarter-over-quarter to $3.7 billion in Q2, as higher prices and transaction fees did not sufficiently counterbalance the decreased block subsidy following the halving. According to H.C. Wainwright’s estimates, the combined market cap of public crypto miners remained steady at $22 billion in Q2 but has since reached new all-time highs, with the sector’s market cap exceeding $30 billion for the first time.

“Recent system outages highlighted the critical need for a resilient, secure, decentralized, and distributed system,” H.C. Wainwright stated.