Bitcoin Miners Face Challenges Post-Halving, CryptoQuant CEO Reports
Miners Could Either Capitulate or Wait For A Price Surge
Ki Young Ju, the CEO of CryptoQuant, reported the challenges that Bitcoin miners face following the halving of BTC. He noted that the miners haven’t shown any signs of capitulation despite the decline in Bitcoin mining revenue. Notably, the mining revenue has plummeted to hit 14-month lows after the BTC halving event in mid-April.
In an April 30 tweet, the CryptoQuant CEO said mining revenue has slipped to low levels not recorded since February 2023 after halving.
The recent Bitcoin halving reduced block rewards to 3.125 BTC from 6.25 BTC, slashing mining revenue by half. One would expect miners to capitulate or sell off some of their Bitcoin reserves to offset bills. However, miners still maintained a neutral stance amid the decline in revenues as they held onto their crypto holdings.
According to Ju, miners now have two options. They could either capitulate or wait for an increase in Bitcoin’s price to cover their expenses.
Moreover, such miners may end up selling off their BTC reserves, creating more decline in the token’s price.
Meanwhile, Bitcoin mining revenues skyrocketed to hit over $100 million immediately after the BTC halving event. Moreover, 75% of the revenues came from fees.
Bitcoin Deviates from Many Expectations Post-Halving
Unlike previous halving cycles, BTC reached a new all-time high of $73,750 in mid-March before the halving. Many anticipated more price rallies post-halving, but things have deviated from expectations.
The crypto market has witnessed a notable price decline in the past week, with Bitcoin leading the downtrend and altcoins trailing closely behind.
As of 05:35 AM EST on May 1, Bitcoin trades at $57,272, reflecting a drop of 7.41% over the past 24 hours. Bitcoin is now over 22% down from its March 14 ATH of $73,750.
Additionally, Hashrate Index data revealed that Bitcoin’s hash price has declined to an all-time low of $46.55, a 74% decline from its post-halving peak. In context, the hash price is the daily estimated value of each tetrahash of hashing power.
With the declining mining revenue, market data provider The Bitcoin Layer says miners face an increased risk of capitulation. If the price of Bitcoin continues to fall over the next few weeks, big miners might have to liquidate some of their holdings to stay afloat.
