This year saw drastic changes in the mining industry, with the halving and DeFi shaking up the sector. Ethereum miners saw their incomes triple since February, while revenues for Bitcoin miners fell by 30% following the halving.
Ethereum Miners Approaches Profit Parity with Bitcoin
Cryptocurrency mining this year is divided into two distinct eras: before and after the halving. Around the same time as the halving is when the decentralized finance trend started to take off.
Before the halving and DeFi, Bitcoin miners made four to five times more than Ethereum miners in the first quarter of 2020. Bitcoin miners earned $400 million on average in the first nine months of 2020, while those mining Ethereum made $150 million in all, according to data pulled from blockchain data firm Glassnode.
Total BTC mining revenue fell by roughly 30% after halving. June was a sluggish month for Bitcoin miners, with block rewards and fees bringing in $272 million. Once hashrates stabilized after the halving, miners earned an average of $350 million in revenue each month.
ETH Miners Profit from DeFi
The DeFi boom caused Ethereum mining revenues to triple since the beginning of the year, nearly reaching parity with Bitcoin in August and September—despite the Ethereum network having just one-fifth of the market capitalization of Bitcoin.
Congestion on the Ethereum network reached unsustainable levels beginning in August, with gas fees reaching all-time highs. Congestion resulted in miners collecting more transaction fees, increasing revenues. Miners earned an average of $305 million per month in ETH, compared to a monthly $90 million over the first two quarters of the year.
In all, Bitcoin miners made $3.55 billion compared to Ethereum’s $1.34 billion year-to-date. Projections by Crypto Briefing predict total BTC mining revenue of $4.6 billion for 2020. Assuming gas prices stay above 100 gwei, Ethereum miners should make around $2.2 billion by year-end.