Bitcoin Halving: How Miners Are Adapting to a New Revenue Reality

The recent Bitcoin halving event has triggered a significant shift in the revenue landscape for miners, altering their strategies and potentially impacting the broader cryptocurrency market, according to a new analysis.

As highlighted by analytics firm Checkonchain in a YouTube video, the recent halving event has significantly shifted miners’ revenue sources, impacting overall market dynamics.

The halving, which reduces the block subsidy by half, forces miners to adapt their strategies. This reduction often leads miners to sell their accumulated Bitcoin to cover operating costs, potentially triggering a capitulation event. However, once the market recovers, hash ribbons — a metric indicating miner revenue strength — typically reverse direction, suggesting improved miner profitability.

Historically, miners have earned from both block subsidies and transaction fees. The halving has diminished block subsidies, leading to less selling pressure, while increased earnings from fees present a positive trend.

Miners act proactively in the market, especially during bear markets when they sell Bitcoin to navigate financial challenges. During bull markets, higher fee earnings allow miners to operate more sustainably.

The miner revenue multiple, which compares current miner revenue to its one-year moving average, offers valuable market insights. This metric helps assess stress or euphoria levels among miners, providing a clearer picture of market dynamics.

The pure multiple, representing the ratio of the current price to the average price over the last 12 months, serves as an indicator of miner stress. A low pure multiple signifies that miners are earning only a fraction of their yearly income, which indicates extreme stress.

Conversely, during bull markets, higher earnings prompt miners to sell more coins to meet shareholder demands. Hash rate inversion — a situation where the faster-moving average of hash rate falls below the longer-term averages — signals miner stress. Weaker miners may scale back operations when profitability declines, leading to these inversions.

Although the current pure multiple does not necessarily indicate capitulation, it reflects a challenging environment. A 4% decline from the all-time high is relatively insignificant. Recently, a hash ribbon inversion occurred, suggesting stress among weaker miners.

As noted by analyst Panos on X, Bitcoin is currently struggling to maintain its highs around the previous market cycle top, experiencing a significant sell-off. Meanwhile, altcoins are also underperforming, reflecting the broader market’s bearish sentiment.

Bitcoin miners, facing financial pressures, are selling a significant portion of their coins to cover operational costs, adding further selling pressure. This market scenario highlights the urgent need for buyers to step up and stabilize the market.