The cost of manufacturing has surpassed the return, making it extremely difficult for bitcoin miners to continue their business.
Bitcoin miners sold all of their May crop: news
The first week of June saw the start of a sell-off phase in the cryptocurrency market, with the majority of cryptocurrencies seeing a 4-year low.
The deteriorating market conditions have also had a negative impact on the profitability of Bitcoin (BTC) mining, prompting miners to sell their BTC holdings.
According to recent statistics from Arcane Research, public Bitcoin mining companies sold all of their production of BTC in May as opposed to the typical 20–40% in April.
Public BTC mining companies sold 30% of their mined output in the first four months of 2022; this percentage jumped thrice in May and is predicted to surge even higher in June.
Even though public BTC miners only contribute up to 20% of the network’s total hashrate, their actions frequently mirror those of private miners as well.
One of the biggest whales on the market, miners possess 800,000 BTC in total. Public miners control 46,000 BTC of these, and their selling binge could drive the price much lower.
With the price of Bitcoin dropping below the 2017 high of $20,000 and reaching a new 4-year low of $17,783, the situation has only gotten worse in June. In June, the volume of BTC mined by miners and transmitted to exchanges reached a new high, surpassing levels last seen in January 2021. This data metric is called “miner’s to exchange flow.”
As Cointelegraph previously reported, when the price of bitcoin fell below $21,000, the ratio of miners to exchange flow reached a new 7-month high. Many mining computers have become unprofitable due to the drop in the price of BTC, prompting miners to exit the cryptocurrency market.
A mining measure called the bitcoin hash price shows the miner’s earnings per terahash. The daily incentives a miner receives for each terahash calculation, expressed as an average in fiat currency (USD/TH/s per day), have reached a new 1.5-year low.
Bitcoin Hash Ribbon, an indicator that aims to identify periods where BTC miners are in hardship and may be capitulating, has crossed, signalling many miners are unplugging their equipment due to lack of profitability.
At a time of BTC price decrease and miner crisis, many believe it is a significant price bottom indicator as well, especially when miners start giving up.
BTC plummeted below $21,000 again and was trading just above $20,000 at press time, witnessing a 6 percent decline over the preceding 24 hours.