Bitcoin miners earned a total of $1.56 billion in December 2023.
A lot of important cultural and technical context plays into why this number is important. But also, the sheer size of the number itself shows that mining economics are starting to become more friendly than they were a year ago.
In fact, all of Q3 was strong for bitcoin miners.
- December revenue grew 35% month-over-month from November 2023.
- November revenue grew 30% month-over-month from October 2023.
- October revenue grew 18% month-over-month from September 2023.
The growth of ordinals, stamps, BRC-20 tokens, and other forms of primitive DeFi on Bitcoin are mostly responsible for this surge in revenue. Of course, Bitcoin appreciating over 150% in 2023 helped. But the percentage of mining revenue from network fees tells the real story.
As the chart below shows, 2023 Q2 saw a brief spike in fees as a percentage of revenue. Network activity quieted down a bit over the next few months, but fee revenue remained elevated compared to the past 24 months.
Then in October 2023, fee revenue soared. By December, fees accounted for nearly 22% of mining revenue. At the height of the 207 bull market, for comparison, fees accounted for nearly 24% of revenue.
The question on everyone’s mind as this new aspect of the Bitcoin economy grows is, “Can it be sustained?” Fee revenue has spiked and dropped throughout Bitcoin’s lifespan, but securing the future of the network after several more halvings depends on sustainable fee revenue. If ordinals, stamps, and BRC-20s can provide part of this long-term revenue will be a big question to answer of the next couple of years.
