Ethereum Gas Prices and Bitcoin Miners’ Revenue Decline

Ethereum Gas Prices and Bitcoin Miners’ Revenue Decline

On Saturday, Ethereum’s mainnet saw its median gas price dip below 3 gwei, a milestone not reached since 2020. This significant drop suggests that Ethereum’s Layer 2 solutions are effectively reducing the cost of transactions on the blockchain, the second most valuable in the world.

A year ago, median gas prices ranged between 15 and 20 gwei, marking a stark contrast to Saturday’s value. The highest median gas price in 2024 peaked on March 5, reaching 83 gwei, as reported by a Dune Analytics dashboard curated by @hildobby.

The downward trend in gas prices began after the Dencun upgrade on March 13, which introduced “blobs” to Ethereum, significantly lowering transaction costs on Layer 2 networks. This decrease in gas prices has also driven Ethereum’s burn rate to a 12-month low, according to The Block. Currently, Ethereum is experiencing slight inflation, with a seven-day average supply growth rate of 0.56% per year, based on data from ultrasound.money.

Bitcoin Miners Face Revenue Challenges

Bitcoin miners have also faced financial challenges, especially following the latest block reward halving event on April 20. Over the past two months, miners’ revenue per terahash per second (TH/s) has reached record lows, as indicated by The Block’s data dashboard.

One factor contributing to the reduced profitability is the low influx of new wallets into the Bitcoin network. The seven-day average of new Bitcoin wallets is at its lowest point since 2018, marking a six-year low.

Despite these challenges, some mining companies are performing well. CleanSpark, for instance, has outperformed Bitcoin’s price so far this year. Bitfarms and Core Scientific have also seen year-to-date gains exceeding Bitcoin’s price increase, although smaller mining firms continue to struggle.

In a notable development, former U.S. President Donald Trump recently met with representatives from the American Bitcoin mining industry, expressing his support for miners in the event of a victory in the upcoming Presidential election.