On April 20, the long-awaited halving took place on the Bitcoin (BTC) network, due to which the reward for the mined block was halved and miners’ incomes fell to 14-month lows.
In addition to the past halving, the fall in the price of the first cryptocurrency also led to a decrease in the income of miners. The asset is currently trading at $57 thousand. However, it seems that nothing can scare Bitcoin miners.
Miners don't give up
The CEO of the analytical platform CryptoQuant, Ki Young Ju, noted that after the halving, miners had a choice. Moreover, it consisted of only two options:
- sell off all your assets now;
- wait for Bitcoin to rise.
Miner incomes have fallen to early 2023 levels. But, according to Joo, so far the miners of the first cryptocurrency “have not shown any signs of capitulation.” Typically, capitulation occurs when miners are unable to cover operating costs. Because of this, they are forced to sell assets, which, in turn, leads to a further drop in the BTC rate.
However, miners are now betting on a future price recovery. This is evidenced by an analysis of the Puwell multiplier metric, which indicates long-term BTC market cycles based on the profitability of miners.
Concerns of the crypto community
According to CoinGecko, over the past week the price of Bitcoin has decreased by almost 10%. On May 1, the asset rate dropped below $57 thousand. At the time of writing, BTC is trading at around $58 thousand.
The negative dynamics have raised concerns about the capitulation of miners. Immediately after the halving, the income of cryptocurrency miners increased sharply. This was influenced by the excitement around the new Runes protocol, as well as the hunt for rare satoshi.
However, in recent weeks, the appetite for new assets on the Bitcoin network has decreased, and along with it, the profits of miners. The Bitcoin Layer research platform, for example, talks about the looming threat of a sell-off of BTC miners.
Not the most optimistic scenario adheres to and Capriole Investments founder Charles Edwards. According to him, falling Bitcoin prices could soon harm miners. He predicts that approximately 15% of mining companies will have to leave the market.
Source: Cryptocurrency
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