Bitcoin Hashrate Breaks From 18-month Trend
14 Jun, 2024 ● Coin news
The hashrate of Bitcoin has deviated from an 18-month upward trend, indicating a possible Bitcoin miner capitulation.
After an 18-month rise, Bitcoin’s true hashrate decreased to about 600 exahashes per second (EH/s). This metric measures the mining difficulty for Bitcoin.
The break from this trend might suggest that some Bitcoin mining companies are offloading their BTC, as noted by Ki Young Ju, founder and CEO of CryptoQuant, in a June 13 X post:
“Bitcoin hash rate’s 18-month upward trend has broken, suggesting some miners are capitulating.”
Despite the decline in Bitcoin’s hashrate, mining companies have not been offloading significant quantities of Bitcoin.
Bitcoin miner transfers to cryptocurrency exchanges dropped from a monthly peak of 15,470 BTC on May 21 to just 7,239 BTC on June 13, according to CryptoQuant.
However, the decrease in Bitcoin’s price does not appear to be driven by miner capitulation.
The BTC price fell from over $71,100 on June 5, to the current $66,800, while daily miner transfers to exchanges continued to decline.
The drop in Bitcoin’s true hashrate could also be due to mining companies shutting down older generation ASIC chip mining rigs, which have become unprofitable since the fourth Bitcoin halving.
Additionally, Bitcoin’s total hashrate fell to 586,377 TH/s on June 12, according to Blockchain.com data.
The temporary decline was anticipated by an April 19 report by CoinShares, which predicts a hashrate surge in 2025. The report states:
“Our model forecasts the hash rate rising to 700 exahash by 2025, although after the halving, it could fall by up to 10% as miners turn off unprofitable ASICs.”
This temporary reduction is linked to the increased costs of Bitcoin mining due to the halving, along with rising electricity prices.
The profitability of mining operations is largely influenced by the electricity costs companies incur. According to a May 2 X post by Hashrate Index:
“S19 XP & M50S++ will operate at a loss if the hash cost rises >$0.09/kWh. >$0.08/kWh k Pros & M50S+ will be unprofitable. And at $0.06-$0.07/kWh the S19j Pro+, j Pros, and M30S++ will struggle.”
Sources:
https://cointelegraph.com/news/bitcoin-true-hashrate-breaks-18-month-uptrend-btc-miners-capitulating
https://x.com/ki_young_ju/status/1801325959074775481/photo/1
https://x.com/hashrateindex/status/1786086008972320967
https://cryptoquant.com/asset/btc/chart/inter-entity-flows/miner-to-exchange-flow-total
