October 2020 was one of the best months in almost three years for Bitcoin miners. According to Coin Metrics data, during that month, network fees soared to $42.9 million. It translated to more than 12% of total miners’ revenue for that month. Also, it went on record as the highest percentage miners got since January 2018.
All in all, miners generated a total of $353 million in revenue. Compared to September 2020 revenue, this was an 8% increase.
According to the research data analyzed and gathered by Comprar Acciones, during the same period, there was a remarkable upsurge in the price of BTC, as it soared almost 30% month over month. In fact, the top cryptocurrency was trading at around $10,800 on October 1, 2020 but by October 31, the price had shot up to over $13,800. Notably, the king of crypto has kept up the uptrend in November 2020. As of November 25, one BTC unit is trading at over $19,300.
Bitcoin’s Price Surges 42% in October 2020
Overall, Bitcoin has had a strong year even as other markets have struggled under the weight of the pandemic. Initially, it went down with the rest of the market, shedding around 50% on March 12, 2020 as panic gripped the global economy.
However, it quickly initiated a recovery and has kept up an uptrend through to Q4. According to data from Investing.com, it was priced at $6,427 in Q1 2020. In Q2 2020, it shot up to $9,150, and further up to $10,794 in Q3 2020.
Since the start of Q4 2020, Bitcoin has recorded impressive performance, shooting up by over 42% in the first month of the quarter alone.
Part of the reason for the upsurge was a growing perception of the cryptocurrency as an alternative store of value.
As a result of the price increase, it has in fact outperformed a good number of top financial stocks. For instance, JP Morgan Chase stock rose by 8% in the first month of Q4 2020. Within the same period, gold rose by 1.44% and the SPX by 5.31%.
Similarly, looking at its year-to-date (YTD) performance at the start of November, BTC is miles ahead of other popular assets. It had gained 108.4% YTD as of November 5, 2020, compared to 25.15% for gold, 6.58% for the SPX and 1.58% for the US dollar.
As a result, 55% of US investors said they were interested in investing in Bitcoin this year, according to Grayscale. Comparatively, in 2019, the percentage of US investors interested in the digital asset was 36%.
BTC Miners Daily Revenue Shoots to $21.6 Million
Another reason behind the massive increase in miners’ fees in October was the mempool congestion, one of the most severe in three years. This was as a result of a drop in network hashrate because of a high number of miners taking their machines offline.
Hashrate refers to the amount of processing power that is directed at the network. Just like BTC price, Bitcoin Network Hashrate (BNHR) has been fluctuating significantly in 2020.
According to data from YCharts, BNHR was 141.83 million on October 1, 2020. From this level, it rose gradually to an all-time high of 147.01M by October 18.
Following that uptrend, it took a nosedive down to a low of 107.64 million on October 31, sinking further down to 106.65 million on November 3. Between November 8 and November 11, it shot up by nearly 50% to 128.16 million.
For some perspective, the BNHR was 108.77 million on January 10, 2020, rising to a peak of 123.29 million on March 8. Since that time, it has hit a number of peaks, including 125.99 million on July 8, 127.33 million on August 18 and 143.14 million on September 19. As of November 22, 2020, it was at 137.85 million, signifying a 51.79% increase YoY.
According to a report by Glassnode, the upsurge in Bitcoin mining revenue is ongoing. As of November 19, 2020, it hit a new yearly high of over $21 million per day. The figure includes both transaction fees and block rewards.
It also shows a correlation between the revenue and BTC price, in relation to the block reward halving event that took place in mid-May 2020. At the time, Bitcoin price was $9,000 and on November 18, 2020, it was double that figure at $18,000.
As such, BTC miner revenue on November 18 went back to its pre-halving level. On that date, miners’ daily revenue was $21.6 million. In comparison, the previous peak was set on May 6, 2020 at $20.6 million.
After the halving event which saw block rewards go from 12.5 BTC to 6.25 BTC, revenue had dropped as low as $7 million a day.