The month of May will go down in history as one of the most volatile months for cryptocurrency investors of 2021. Bitcoin, Ethereum, Dogecoin and a host of other currencies saw wild price swings in May and Ethereum fell as much as 60% from a all-time high reached during the same month. Despite strong price swings, Ethereum miners, including Hive Blockchain, could have generated record monthly revenue in May 2021.
Total Ethereum mining revenue hits new records
Total revenue generated by all Ethereum miners in May reached $ 2,31 billion at the time of writing, up from a record $ 1,65 billion in April.
Two main factors include grants and record transaction fees. Subsidies are payments, in ETH coins, paid to miners for processing assets and validating transactions on the blockchain. Transaction fees act more like incentives, as traders compete for scarce IT resources.
Average transaction fees (seven-day moving average) hit a new record close to $ 44 per transaction by mid-May. Unfortunately, for miners, fees have since dropped below $ 11 per transaction, which is consistent with the rates observed during the first week of May.
Why did Ethereum miners' revenue increase in May?
ETH prices (quotation in real time) and total trading volumes increased during the month. And the exponentially growing total computing power provided by miners (hash rate) has also hit new records.
Transaction volumes increased as traders realized the hysteria that pushed cryptocurrency prices to record highs during the second week of May. Trading volumes even increased further during market sales. Elon Musk's tweets and a government crackdown on cryptocurrencies in China should be blamed for acute volatility in the cryptocurrency market in May, but so should the attacks of greed and investor fear triggered by those "market events" .
Notably, the rise in decentralized finance (DeFi) transactions (which are largely based on Ethereum) has also affected transaction volumes. To add more, the rise of non-fungible tokens (NFTs) has been “complicating” in the growth of the ETH business ecosystem.
Trends could be recurring and likely permanent. Investors in dedicated Ethereum miners, including the Hive Blockchain stock, should continue to watch the wave of emerging DeFi applications; it could be what ETH needs to one day surpass Bitcoin as the most revered coin in the cryptocurrency market.
Time to buy Hive stock?
Fundamentals have improved for Ethereum miners this year, but Hive shares are trading at a 55% discount from all-time highs.
That said, Hive's extreme stock price volatility makes it more suitable for those who wish to do so and are able to stay calm and ride the storm waves.