The past year has been a troubled one for the cryptocurrency mining industry. Now, however, a recent report from the cryptocurrency industry newsletter Diar has confirmed that Bitcoin mining revenues have started increasing.
Bitcoin mining revenue recently hit an 18-month low
Specifically, this comes as Bitcoin mining revenues hit an 18-month low this February. To put this into perspective, February’s Bitcoin mining revenues were the lowest they have been since the start of Bitcoin’s dramatic 2017 bull run.
In fact, February’s Bitcoin mining income amounted to approximately $195 million. This can be compared to January’s Bitcoin mining incomes of around $210 million. Moreover, it is a far cry from the historic $951 million mining revenue seen in December of 2017.
Furthermore, Diar also referenced the increasing competition in the industry, driving up the required hash power needed to stay competitive.
”To make matters slightly more difficult, miners running optimal equipment and who have secured wholesale electricity prices have seen their gross margins squeezed requiring a massive deployment of hash power in order to stay afloat.”
Diar’s report went on to note that the increased competition within the industry has significantly impacted its gross margins. Statistically speaking, gross margins for the Antminer S9 have fallen from 94% at the start of 2018, to just 32% during January of 2019.
Market shows signs of recovering with rising margins
With that being said, however, margins increased in February of 2019 to 39%. Diar also suggested that the industry will likely see mining operators deploy the latest mining equipment in a bid to remain competitive and stay ahead.
Consequently, this will likely lead to an increase in hash power in the coming months. This prediction lends some credence from the fact that Bitmain revealed that the company’s latest flagship miner, the Antimer S15, has already sold out twice over.
Furthermore, the S15 has been touted by Bitmain as delivering an average gross margin 84% higher than that of the S9.
It remains to be seen exactly how the market will continue to develop, but rising margins and hash power seems to suggest that it is in the midst of recovering somewhat. Nevertheless, any sudden market turbulence could naturally change this.
For example, Nvidia has previously noted how hard the market turbulence of the cryptocurrency sector can be to determine. Furthermore, Nvidia has also stated how this increases the uncertainty for firms with exposure to the cryptocurrency mining sector.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.