Key Points
- Bitcoin miners may face challenges in the coming months if prices don’t significantly recover.
- Despite a dip in Bitcoin’s price, major capitulation among miners has not yet started.
As the summer season approaches, there are concerns that Bitcoin miners might face considerable hurdles, especially if there isn’t a significant price recovery.
Despite the price of Bitcoin dropping below the $58,000 threshold, leading to weaker investors selling at the current rates, there hasn’t been a major capitulation among Bitcoin miners.
Network Hashrate and Profitability
Julio Moreno, the head of research at CryptoQuant, stated in an interview that the network hashrate is slightly above pre-halving levels. He added that miners with “relatively efficient equipment” can still make a profit.
He also mentioned that the break-even electricity price for ASIC models S19 and S21 is still above the electricity cost for large industrial miners.
Concerns for Retail Miners and Price Volatility
However, Moreno noted that some retail miners, particularly those using older ASICs like S17 and S19, might be experiencing negative profits due to higher electricity costs. He added that a capitulation event will depend on the evolution of the network hashrate and prices in the coming weeks.
Addressing worries about potential price volatility during the summer slowdown, Moreno stressed that miners typically react to price changes rather than causing them. However, he didn’t dismiss the possibility of Bitcoin experiencing more selling pressure in the upcoming months.
He stated that the market is more likely to witness a miner capitulation if prices don’t significantly recover during the summer, especially with the hashprice (average miner revenue per hash) hitting new lows.
Even though their revenue has dropped to levels last seen in early 2023 due to the recent halving, which reduced fixed block rewards from 6.25 BTC to 3.125 BTC, Bitcoin miners are not selling their crypto holdings at current prices.
CryptoQuant CEO Ki Young Ju stated that miners now have two options: capitulate or wait for a rise in Bitcoin’s price, which is currently trading below the $58,000 mark.
