The dogecoin (DOGE, +18.74%) army is not the only one making a killing this year. Miners responsible for generating the Shiba Inu-themed cryptocurrency may also be laughing their way to the bank.
- The daily revenue of dogecoin miners rose to a record high of $3.6 million on April 26, marking a 4,575% rise from the New Year’s day tally of $77,000, blockchain data provided by ByteTree shows.
- Revenue estimates assume miners, who operate predominantly on cash, sell their coins immediately.
- Miners receive newly created coins and transaction processing fees as a reward for mining blocks and processing transactions on the distributed ledger.
- The price of dogecoin has rallied by 7,000% this year, sending miner revenue skywards.
- The meme-based cryptocurrency reached a record high of 45 cents on April 18 and was last seen changing hands near 32 cents, up nearly 20% rise on a 24-hour basis.
- Data provided by Coin Metrics shows a 60-fold increase in daily transaction fees this year alongside several brief spikes in the number of daily transactions.
- However, transaction fees brought in just $23,200 or 0.64% of the total miner revenue of $3.6 million on April 26.
- “Transaction fees have risen, but price overwhelms,” ByteTree’s CIO Charlie Morris said.
- “The market has been squeezed higher. I suspect many people who owned it a few years ago have forgotten, leading to tighter supply than perceived,” Morris added.
- Some observers fear the ongoing price rally is a bubble that can burst easily as 98 wallets are holding nearly 65% of all coins. Besides, the cryptocurrency is heavily influenced by Tesla and SpaceX CEO Elon Musk’s usually humorous tweets.
- Bitcoin bull and CEO of Galaxy Digital Mike Novogratz recently called dogecoin’s rally a sign of speculative retail frenzy.
- However, DOGE’s real-world adoption is gaining traction with basketball team Dallas Mavericks, medical supplier CovCare, and several others adopting the cryptocurrency as a payments alternative.
Also read: Dogecoin Spikes on Elon Musk’s SNL Tweet