Bitcoin mining revenue has reached its highest level this year, thanks to the recent surge in the price of the cryptocurrency. This surge is fueled by the anticipation of the approval of a U.S. spot Bitcoin ETF by the SEC. According to data from Blockchain.com, BTC mining revenue reached $42,386,514.038 on November 9, surpassing its previous yearly high of $41,744,197.067 set on May 8, 2023. The current price of BTC stands at just over $37,200, with a 7.5% increase in the past week.
The increase in mining revenue is attributed to two main factors: the price of BTC itself and the activity level of the Bitcoin network. When the network is more active, more people are using it and paying higher fees for transactions. In May, even though Bitcoin’s price was not exceptionally high, the network was congested, leading to a significant boost in miner earnings. However, the recent increase in earnings is primarily due to the rising price of Bitcoin.
In May, the network congestion was caused by the high demand for Ordinals, which are similar to NFTs and allow digital assets to be inscribed on the Bitcoin blockchain. Miner revenues spiked to $40 million per day, even though the BTC price at the time was much lower than it is now.
The recent price surge of Bitcoin is closely tied to the possibility of the SEC approving a Bitcoin ETF. The expiry of deadlines for rebuttal comments on some pending ETF applications has created a brief window in which 12 applications could be approved simultaneously. Additionally, Grayscale, a digital asset manager, has been in talks with the SEC regarding its application to convert the Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF. This follows an order issued by the U.S. Court of Appeals for the SEC to review Grayscale’s application, criticizing the SEC’s actions as “arbitrary and capricious.”
It is important to note that the SEC has previously rejected every application for a spot Bitcoin ETF. However, the approval of a U.S. spot Bitcoin ETF is seen as a significant milestone for institutional acceptance of the cryptocurrency. It would enable investors to gain exposure to the cryptocurrency market without directly holding the asset themselves. Several hedge funds and investment firms have filed applications with the SEC for a Bitcoin ETF, and BlackRock, the world’s largest asset manager, has also filed its own application.
According to analysts at JP Morgan, there is a possibility that a spot Bitcoin ETF could be approved by the SEC as early as January 2024. This development could further accelerate the adoption of Bitcoin by institutional investors.
In conclusion, the recent surge in Bitcoin mining revenue is a result of the price rally and anticipation of a U.S. spot Bitcoin ETF approval. This approval is considered a significant step towards institutional acceptance of Bitcoin.