- Bitcoin’s hash rate showed resilience, while BTC struggled to cross the $70,000 mark.
- The European regulatory response focuses on potential market abuse risks associated with MEV.
Unlike previous years, this is the fourth Bitcoin [BTC] Halving was very different. Although block grant rewards for miners have now been reduced from 6.25 BTC to 3.125 BTC, they continue to earn additional transaction fees for each block mined.
With previous halvings Bitcoin’s hash rate decreased due to insufficient rewards for transaction costs. This time, the hash rate remained near an all-time high, rising from 630 EH/s to 640 EH/s after the halving, driven by higher transaction fee rewards.
However, at the time of writing it dropped back to 602 EH/s.
Source: Glassnode
While Bitcoin’s hash rate showed resilience, its price, on the other hand, seems to be struggling to cross the $70,000 mark.
What statistics suggest about Bitcoin mining
According to on-chain data from The Block, Bitcoin’s hash rate has fallen since May 26, indicating potential risks to the network. In such situations, miners may struggle to make a profit from their activities.
Source: Het Blok
This was further confirmed by Glassnode’s, miners’ incomes block data. As of the last update, on-chain data shows that miner earnings have dropped significantly to 384,375 BTC, compared to 525 BTC on May 26.
Source: Glassnode
However, some still view this situation as a net positive for Bitcoin, as highlighted recently InvestReply current.
“That’s good because miners normally wouldn’t jump in to mine Bitcoin unless the price goes up and is big enough to support a large chunk of it.”
Looking at the Bitcoin mining difficulty data, you can see how difficult it is to find the right hash for each block. Please note that this difficulty does not affect the price of the mined BTC. Thus, BTC prices play an important role in determining the profitability of miners.
What’s going on around MEV?
But block rewards aren’t the only way miners can make money. Maximum Extractable Value (MEV) refers to potential profits that miners can achieve by employing strategies such as front running, sandwich attacks, etc. that rely on their ability to reorder transactions within a block.
Recognizing the threat that MEV can pose to investors, the European Securities and Markets Authority (ESMA) recently shared its plan to limit the MEV used by miners and validators, viewing this as potential market abuse.
Although the proposal is still in the draft stage, stakeholders have until the end of June to comment. If approved, it could have significant implications for validators and miners worldwide.