The halving paradox: Why miners earn more despite getting 93.75% less Bitcoin
Key Takeaways
Has Bitcoin’s worth appreciation saved up with the provision discount from halvings?
Sure, after which some. Bitcoin’s worth progress has outpaced provide discount throughout all 5 halving epochs.
Are miners as we speak incomes roughly than miners in 2020?
Present miners incomes 3.125 BTC per block [$340,000] already make greater than 2020 miners who earned double the Bitcoin.
Bitcoin miners as we speak earn simply 3.125 BTC per block—93.75% lower than the 50 BTC they acquired in 2012. But they’re richer than ever.
This counterintuitive actuality reveals one in every of Bitcoin’s most fascinating financial options: much less BTC has persistently meant extra wealth.
The Bitcoin numbers inform the story
Historic knowledge from Unchained exhibits a transparent sample throughout Bitcoin’s 5 halving epochs. Every epoch has ended with block rewards value extra in greenback phrases than when it began, regardless of miners receiving half the BTC halfway by means of.
Epoch 4 [2020-2024] demonstrates this completely. Miners began incomes 6.25 BTC per block value $54,000.
They ended the epoch incomes the identical 6.25 BTC, however value $398,000—a 637% enhance. Bitcoin’s worth appreciation fully overwhelmed the provision discount.
Supply: Unchained
The present Epoch 5 continues this pattern. Block rewards began at $199,000 [3.125 BTC]. With Bitcoin now buying and selling round $109,000, those self same 3.125 BTC blocks are value roughly $340,000.
We’re solely months right into a four-year epoch, but block rewards have already jumped 71%.
This implies a miner as we speak incomes 3.125 BTC per block makes more cash than a 2020 miner who earned double the Bitcoin [6.25 BTC] at Epoch 4’s begin.
Why conventional economics will get Bitcoin incorrect
Commonplace shortage logic suggests slicing provide by 50% ought to minimize income by 50%. Bitcoin defies this. As a substitute, miners who survive the preliminary halving shock typically see income will increase of 300-600% by epoch’s finish.
This creates distinctive mining economics. When the halving hits, miners face an instantaneous 50% income minimize.
Nonetheless, those that climate the storm usually develop into extra worthwhile inside 12-18 months as BTC’s worth adjusts to the brand new provide dynamics.
Miners are promoting regardless of report rewards
Latest on-chain knowledge provides an intriguing twist. Glassnode exhibits miners distributed Bitcoin at charges not seen for the reason that FTX collapse all through September and October 2025.
This heavy promoting occurred whereas miners earned essentially the most precious block rewards in BTC’s historical past.
Supply: Glassnode
A number of components clarify this: profit-taking after BTC examined $125,000, operational prices requiring fixed {hardware} upgrades, and publicly-traded mining corporations realizing positive aspects for shareholders.
The timing, simply earlier than Bitcoin’s correction from $125,000 to present ranges, suggests some miners efficiently timed a neighborhood prime.
What comes subsequent
If patterns maintain, Epoch 5 may finish with block rewards exceeding $1 million per block, although miners obtain simply 3.125 BTC. This may require Bitcoin to achieve $320,000 or greater by 2028.
The vital query is sustainability. Every halving requires larger worth multiples to take care of the sample.
Epoch 2 wanted a 55x enhance, Epoch 3 wanted 13.5x, and Epoch 4 wanted 7.4x. As BTC’s market cap grows, these multiples develop into tougher to attain.
Nonetheless, rising institutional adoption, potential sovereign treasury purchases, and BTC’s maturing position as a retailer of worth may present the mandatory demand for a number of extra epochs.
The underside line
Whereas miners earn 93.75% much less Bitcoin than in 2012, they’re incomes a whole bunch of hundreds of {dollars} per block.
For fifteen years throughout 5 epochs, much less has meant extra in BTC. Whether or not this continues is determined by BTC’s means to maintain appreciating sooner than provide decreases—however to this point, the paradox holds robust.
