According to Coin Metrics, a provider of market data for cryptocurrencies, Bitcoin miners earned a total profit of more than $9 billion in 2022. This record profit occurred when the global cryptocurrency market was experiencing a crash due to various negative events such as the Terra crash and FTX’s ignoble end.
In the chart above, Coin Metrics tracks the value of mined Bitcoin just as they are being released.
Bitcoin Mining Business Sees $47M in 13 Years
The data was shared in a tweet by Jameson Lopp, the co-founder of bitcoin security provider Casa. Lopp noted that the $9 billion earned is a “significant addition to the $47 billion total over the past 13 years.”
Bitcoin miners earned over $9 billion in 2022, a significant addition to the $47 billion total over the past 13 years. This number assumes they instantly sell for fiat, which is most certainly not the case – miners are HODLers. pic.twitter.com/91OMkT7hOr
— Jameson Lopp (@lopp) December 19, 2022
The total $9 billion earned can be considered theoretical as Lopp mentioned that the result from Coin Metrics’ data “assumes [that the miners] instantly sell for fiat.” This implies that the miners garnered $9 billion in earnings by immediately selling off the mined Bitcoin at the trading price of BTC at the time of sale.
Lopp believes this is theoretical because most miners, according to Lopp, hold their mined BTC and are not quick to sell them.
This, therefore, means that the total earnings stated by Coin Metrics would be more than $9 billion if it was put into consideration that several miners will hold their mined BTC, and vice versa.
How Institutional Bitcoin Miners Are Fairing
Despite the theoretical boost in the Bitcoin mining business, reports have shown that several institutional Bitcoin miners are recording liquidity difficulties.
The latest of them is the United States-based Bitcoin mining firm, Greenidge Generation. Earlier today, a filing revealed that the firm owed a debt of $74 million to the digital asset firm NYDIG.
To tackle the debt, the Bitcoin mining company declared its plan to sell 70% of its mining machines to its creditor, NYDIG. By selling the equipment, Greenidge’s debt would reduce to only $6 million to $17 million.
Other Bitcoin mining firms, such as Core Scientific, Argo, and Poolin, have also recorded financial struggles.
One of the prominent reasons for their liquidity crunches is the decline in the price of Bitcoin. After seeing an all-time high of about $68,000, Bitcoin’s price has tanked over 75% of its peak value. Currently, Bitcoin trades at $16,700.
Another cause of the financial struggles amongst Bitcoin miners is the increased amount of electricity tariff.
