Key on-chain metrics such as Bitcoin (BTC) mining revenues have returned to pre-halving levels, according to recent research.
Data from analytics provider Glassnode suggests that revenue from Bitcoin mining is now back at the same levels it was as when block rewards were double what they are now.
When the halving took place in mid-May, the BTC price was around $9,000. On Nov. 18, it had doubled to $18,000. This suggests a correlation, as miners need to sell enough of the asset to cover their expenses while their operations remain profitable. Higher prices mean greater profits.
Blockchain.com, which tracks the total value of coin-base block rewards and transaction fees paid to miners confirmed the findings.
The daily revenue figure, which includes block rewards and transaction fees, was $21.2 million for Nov. 18, its highest for a year. The previous peak was on May 6, when it reached $20.6 million. Following the halving event, which dropped block rewards from 12.5 BTC to 6.25 BTC, revenue plummeted to just over $7 million per day.
Mining revenue saw an earlier slump on March 18 this year following the pandemic-induced crypto market crash, which wiped 45% off the price of Bitcoin in less than a week. When mining revenue falls steeply, overleveraged miners can begin capitulating due to unfavorable market conditions.
The opposite appears to be happening at the moment as prices approach their all-time high.
Another factor indicating that the network is healthy and miners are happy is the hash rate, which is now just 10% away from its highestever level.
Following the end of the rainy season in China, where the majority of Bitcoin mining takes place, rigs were powered down in preparation for relocation as cheap hydroelectric power dried up. This resulted in a seasonal hash rate slump of 37% to less than 98 exahashes per second.
Since then, hash rate — which many believe is correlated to price — has recovered to 143.4 EH/s, which is not far off its mid-October peak of 157.6 EH/s, according to Bitinfocharts.com.
The current mining revenue figures and hash-rate recovery bodes well for the continuation of the bull market, which may just take Bitcoin prices to a new all-time high before the end of the year.