Bitcoin miners are currently experiencing a rise in profitability and an uptick in hashrate following the recent rally of Bitcoin to the $69,000 range. The recovery of the hashrate by 6% to 604 EH/s is a positive sign for the network, indicating potential stability and strength in the market. Additionally, the Miner Profit/Loss Sustainability metric shows that miners are now receiving higher revenues compared to previous months, with daily miner revenues increasing by approximately 50%.
With the increase in profitability and revenues, miners are likely to have less incentive to sell their Bitcoin holdings to cover operational costs. This can potentially lead to a decrease in selling pressure from miners, which could have a positive impact on the overall market dynamics. The fact that daily miner outflows have decreased from 10,000-20,000 BTC to 5,000-10,000 BTC in July further supports the idea of reduced selling pressure.
Disparity Between Large and Small Miners
The data also highlights a disparity between larger Bitcoin mining entities and smaller firms in terms of their BTC holdings. While larger miners have been increasing their balance from 61,000 BTC to 65,000 BTC, smaller miners have seen a decrease in their holdings from 59,000 BTC to 51,000 BTC. This trend could indicate that smaller miners are more inclined to sell their Bitcoin after the halving event, potentially due to profitability concerns.
Despite the current positive trends in profitability and hashrate recovery, there is a warning from CryptoQuant about the risk of miners facing “depressed levels” with regard to fees. This caution is rooted in the idea that miners’ profitability is heavily reliant on Bitcoin’s price, which can be volatile and subject to market fluctuations. It is important for miners to assess their operational costs and revenue streams carefully to avoid potential challenges in the future.
The recent developments in Bitcoin miners’ profitability and hashrate recovery paint a positive picture for the cryptocurrency market. The decrease in BTC selling pressure, along with the disparity between large and small miners, offers valuable insights into the evolving landscape of Bitcoin mining. However, it is essential for miners to remain vigilant and adapt to changing market conditions to ensure long-term sustainability and success in the industry.