Bitcoin miners are making more money with the rising price of Bitcoin BTC/USD, but margins could be under pressure as more mining companies enter the market given the limited supply.
How Much Do Bitcoin Miners Make? Bitcoin miners have to invest millions of dollars and the daily revenue can be $30,000 to $60,000 per day, Marathon Digital Holdings MARA CEO Fred Thiel told viewers at the Benzinga Crypto Festival.
“The more people that come into the industry, the more people fighting for those 900 Bitcoin,” Thiel said, referencing the finite amount of Bitcoin that can be mined per day.
Margins on Bitcoin mining could become compressed over time, the CEO said.
DMG Blockchain DMGGF CEO Sheldon Bennett told viewers another way to look at the Bitcoin mining market is to look at the total addressable market in dollars.
The Bitcoin mining market is a $16-billion market one based on the cryptocurrency's price and number of Bitcoin that can be mined annually, he said.
Around $5 billion is spent in costs by Bitcoin mining companies, leaving $11 billion in profits for the miners.
A rising cost of Bitcoin can be beneficial for Bitcoin mining companies, Bitfarms BFARF Chief Mining Officer Ben Gagnon said.
“We have fixed costs; it's all upside for miners,” Gagnon said.
The only difference for miners is the margins, which go up with a higher price for Bitcoin.
Gagnon said Bitcoin mining is more profitable than it was years ago and increased interest from institutional investors in miners is coming as companies have “revenues derived in Bitcoin.”
China's Ban On Bitcoin Miners: The panel discussed the decision by China to ban Bitcoin miners. Bennett said there are many theories on why China made the decision to ban the sector.
Bennett said China could possibly be pushing its own cryptocurrency and noted criticisms over energy usage.
The change in Bitcoin miners in China gave existing operators a greater share of the market. Thiel said that could change with more miners entering from the U.S. market and other parts of the world, as well as increased mining rates.
“You’ll see an explosion of Bitcoin mining hash rates,” Thiel said.
Hut 8 Mining Corp HUT CEO Jaime Leverton said China banning Bitcoin mining changed the industry dramatically.
“It’s good for the industry,” Leverton said.
Hash rates changed as a result of the move, she said.
The Bitcoin Council: Another topic from the panel was the introduction of the Bitcoin Council. Gagnon said the council was created in part to share data the media is missing.
“We’re not causing the harm. None of the data is agreeing with them,” Gagnon said.
Thiel told viewers that the Bitcoin Council is not a decision-making body and its goal is to share information with the public.
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