Crypto Miner Revenue Slumps as Energy Usage Draws White House Scrutiny
- U.S. lawmakers are preparing new policy recommendations for crypto miners.
- Mining revenue and profitability have tanked to yearly lows.
- Crypto markets are down 30% over the past 30 days.
The crypto winter is starting to bite deeper, not just for digital asset investors. Crypto and Bitcoin miners are also suffering due to declining profitability as the White House wolves continue to circle.
The Biden administration is preparing new policy recommendations to decrease the energy consumption and carbon footprint of the crypto mining industry, according to Bloomberg. It is the first major foray into a sector that is poorly understood by U.S. policymakers, many of which would be happy to see it quashed in its entirety.
The crypto mining sector is a grey area for politicians who like to hold it accountable for the climate crisis, among other things. The principal assistant director for energy for the White House Office of Science and Technology Policy, Costa Samaras, commented:
“It’s important, if this is going to be part of our financial system in any meaningful way, that it’s developed responsibly and minimizes total emissions. When we think about digital assets, it has to be a climate and energy conversation,”
While the annual BTC mining energy consumption is more than that of the Netherlands, according to Cambridge University, the vast majority of mining operations in the U.S. uses renewable sources. By comparison, the global Bitcoin mining sector consumes about the same amount of energy annually as all of the lighting and televisions in the U.S. alone.
Mining Revenue Plunges
Ill-informed lawmakers are not the only thing crypto mining operators have to be worried about. The lengthening downtrend in markers has caused revenues and profitability to crash to their lowest levels in a year.
Bitcoin mining revenue tanked more than 25% in May to a low of $900 million, according to on-chain data. Blockchain.com reported that it fell from around $40 million per day at the beginning of the month to below $30 million by the end of May. Daily mining revenue slumped to an eleven-month low of $22 million on May 24, and on June 2, it was measured at $24 million.
Mining profitability, which measures the dollar income per day per terahash per second, has also plummeted to its lowest levels in 19 months, according to Bitinfocharts. Currently, Bitcoin miners can expect to earn just $0.128 USD per day per TH/s, a figure that is down more than 70% since November 2021.
Crypto miners usually sell off some of their holdings and power down their rigs during bear markets, which could cause further downside pressure on markets.
Crypto Winter Deepens
Crypto markets are up marginally on the day, but the downtrend is strongly bearish. Total market capitalization has climbed 1.7% to $1.31 trillion. However, it is down more than 30% or $600 billion over the past month.
Bear markets are usually long, drawn-out affairs lasting more than a year, so there could be much more pain ahead for crypto assets.