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Bitcoin Hashrate Uptrend Breaks: Miner Capitulation?

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Bitcoin Hashrate Uptrend Breaks: Miner Capitulation?

Bitcoin’s hashrate has experienced a significant decrease, breaking the 18-month long uptrend it was on, which might indicate the beginning of a potential miner capitulation. This trend saw Bitcoin’s true hash rate plummet to about 600 exahashes per second (EH/s). The hash rate serves as an indicator of the difficulty miners face while mining Bitcoin. The deviation from the uptrend could suggest that some mining firms are offloading their Bitcoin, according to Ki Young Ju, the CEO of CryptoQuant. In a post on June 13, he commented that the breaking of the 18-month upward trend in Bitcoin’s hash rate suggests that some miners might be capitulating.

Despite the declining hashrate, it doesn’t appear that mining companies have been offloading large quantities of Bitcoin. From a peak of 15,470 BTC on May 21, Bitcoin miner flows to cryptocurrency exchanges had dipped to 7,239 BTC by June 13, based on data from CryptoQuant. This counters the notion that miner capitulation is responsible for Bitcoin’s decline in price.

The price of Bitcoin fell from over $71,100 on June 5 to around $66,800, yet daily miner flows to exchanges showed a downtrend. This discrepancy suggests that the price drop wasn’t a direct result of miner capitulation.

Another explanation for the decline in Bitcoin’s true hashrate is that mining firms may be shutting down older generation ASIC mining rigs. These rigs have become less profitable since the fourth Bitcoin halving. Concurrently, Bitcoin’s total hashrate decreased to 586,377 TH/s on June 12, according to data.

An April 19 report from CoinShares had anticipated this temporary drop in hashrate, predicting a surge next year. The report forecasted that the hashrate could rise to 700 exahashes by 2025, although it might decrease by up to 10% post-halving as miners might turn off non-profitable ASICs. This reduction is thought to be driven by increased mining costs attributed to the halving event and rising electricity prices.

Mining profitability is heavily contingent on the cost of electricity. According to a May 2 post by Hashrate Index, older ASIC models like the S19 XP and M50S++ become unprofitable if the electricity cost is above $0.09 per kilowatt-hour. Similarly, the S19j Pro+, j Pros, and M30S++ models would struggle to maintain profitability if electricity costs ranged between $0.06-$0.07 per kilowatt-hour.

These dynamics underscore that while the overall hashrate and profitability concerns might be factors in the market, they don’t alone justify the recent drop in BTC prices. External market conditions, driven by broader economic or regulatory events, could also be contributing factors.

It’s essential to view the recent developments in Bitcoin’s hashrate and prices within a broader context. The halving event, rising energy costs, and potential miner shutdowns of older ASIC units present intertwined challenges and consequences. Current data does not fully support the argument that miner capitulation alone is responsible for Bitcoin’s recent price movements.

40 thoughts on “Bitcoin Hashrate Uptrend Breaks: Miner Capitulation?

  1. Ki Young Ju talking about miner capitulation just layers on the doom and gloom. Ugh! 🙄

  2. The relationship between older ASIC models and electricity cost is something I hadn’t considered before. Thanks for the new perspective!

  3. Truly insightful, covering all angles from mining to external economic factors. Bitcoins journey is indeed fascinating.

  4. Such a thorough article! Everything about mining profitability and electricity costs helps paint a clearer picture of the current state of Bitcoin.

  5. A deep dive into the reasons behind BTC’s price movements shows how volatile and intricate this market is. Much appreciated!

  6. Predicted surge in hashrate next year? Yeah right. How many times have we heard this before?

  7. Despite the decline, the nuanced discussion here reassures me about Bitcoin’s resilient future. Keep calm and mine on!

  8. All this talk about miners shutting down older ASIC rigs isnt very reassuring. It’s like Bitcoin is caught in a perfect storm.

  9. The discrepancy between miner flows and BTC price drops is really confusing. Theres just too much uncertainty.

  10. Understanding the declining hashrate through the lens of electricity costs and ASIC profitability is truly enlightening.

  11. Great, another reason for Bitcoin doubters to chime in! This hashrate drop is bad news, plain and simple.

  12. The expectation of a hashrate surge by 2025 gives hope! Lets keep an eye on energy costs and their impact.

  13. The complexities of Bitcoin mining continue to intrigue me. Even with declining hashrate, its reassuring that levels may rise again.

  14. Fantastic coverage on the expected hashrate trends and their implications post-halving. Keeping fingers crossed for a hashrate increase!

  15. If older models can’t stay profitable due to electricity costs, we’re in for a rocky road. Minings looking bleak.

  16. The April report predicting this drop doesnt make it any less alarming. Rough times ahead.

  17. Not offloading Bitcoin, but hashrate still plummeting? Something’s not adding up and it’s concerning.

  18. It’s fascinating to see how interconnected mining profitability, electricity costs, and broader economic factors can be. Comprehensive and informative!

  19. The anticipated surge in hashrate by next year sounds promising! Future holds so much potential despite current fluctuations.

  20. This drop in Bitcoin’s hashrate is honestly worrying. It’s like the sky is falling for miners right now. Not a good look! 😟

  21. What a mess! The hashrate going down significantly could mean more trouble than we think. Just not what we needed.

  22. Further declines in BTC prices despite lower miner flows to exchanges are definitely intriguing. Complex market dynamics at play!

  23. Reading this analysis reminds me how nuanced and multi-factorial the Bitcoin ecosystem is! Here’s to better times ahead.

  24. Amidst the decline, its nice to see anticipation of recovery in hashrate. Great work breaking down the influences!

  25. What a disaster. If miners start capitulating, things could get ugly fast.

  26. ASICs becoming unprofitable because of the halving? This is the kind of headache miners don’t need right now.😤

  27. Interesting analysis on the factors influencing Bitcoin’s price and hashrate. It’s crucial to consider both internal and external dynamics in this ecosystem. 🌐📊

  28. This hashrate drop feels like the canary in the coal mine. Not impressed with Bitcoins trajectory.

  29. Truly insightful article! The finer details about older ASIC models and electricity costs are something every miner should keep in mind. 🔧🧠

  30. Appreciating the insight on potential miner shutdowns of older ASIC units. These are significant factors for anyone involved in Bitcoin mining.

  31. Impressed by the analytical approach here. It’s vital to consider not just miner activities but external economic conditions as well.

  32. The ebbs and flows of Bitcoin mining really show the complexity of this market. This temporary drop in hashrate was expected, so it’s fascinating to see how predictions align with real-time data. Kudos to CoinShares for their forecast!

  33. Good reminder that not everything is driven by miner capitulation. Bitcoins market is influenced by a myriad of factors.

  34. It’s amazing how rising energy costs and aging mining rigs contribute to the market’s current state. Always something new to learn in Bitcoin. 🏷️🌱

  35. Ki Young Ju’s insights on mining capitulation are eye-opening. Time to keep a close watch on how this unfolds. 👀⏳

  36. Hats off to this nuanced take! The interconnectedness of market conditions make Bitcoin an interesting space to watch.

  37. The nuanced approach towards why Bitcoin’s hashrate and prices are dropping is spot on! A broad viewpoint is necessary to understand these movements. 🌐📚

  38. Rising electricity prices adding to the problem. As if miners didnt have enough to worry about!

  39. Always insightful to read about the broader context in Bitcoin’s market movements. Kudos to the detailed analysis provided. 🎯📋

  40. Electricity costs dictating profitability just adds another layer of stress. Bitcoin mining is starting to look less and less sustainable.

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