Bitcoin (BTC) miners find it extremely difficult to continue their activities. This is due to the fact that production costs are currently higher than profit.
Bad conditions for BTC miners
The crypto market entered a sell-off phase in the first week of June. In which a market wide path was observed and most cryptocurrencies fell to their lows of the past 4 years.
The deteriorating market conditions have also negatively impacted the profitability of BTC mining. This forced miners to liquidate their BTC holdings.
New data from a survey by Arcane shows that public Bitcoin mining companies sold 100% of their BTC production in May. This compared to the usual 20-40% earlier.
In the first four months of 2022, public BTC mining companies sold 30% of their production. This tripled in May and is expected to rise further in June.
Although public BTC miners only make up 20% of the total network hashrate, their behavior often reflects the feelings of private miners as well.
Miners together hold 800,000 BTC, making them one of the largest whales on the market. 46,000 BTC are owned by public miners. Their sell-off could push the price further down.
New Lows for Bitcoin
The situation has only worsened in June. Bitcoin price plunged below $20,000 from 2017 to a new 4-year low of $17,783. “Miner’s to exchange flow,” a data metric showing the volume of BTC sent to exchanges by miners, hit a new high in June. A level not seen since January 2021.
As Cointelegraph previously reported, the BTC-miner-to-exchange flow ratio has hit a new 7-month high as the BTC price plunged below $21,000. The drop in price has also made many mining machines unprofitable, forcing miners to exit the crypto market.
Bitcoin hash price is a mining statistic that shows the miner’s earnings per terahash. It is the average value, in fiat currency, of the daily rewards a miner gets per each Terahash calculation (USD/TH/s) per day. It has fallen to a new low of the past 1.5 years.
Bitcoin Hash Ribbon is an indicator that tries to identify periods of time when BTC miners are in distress and may capitulate. This has been exceeded, indicating that many miners are disconnecting their machines due to lack of profitability.
Finally, in a time of BTC price decline and a mining crisis, many believe that this is also a strong bottom price signal. Especially when miners start to give up. This, in turn, could be a positive sign.
