Since the Bitcoin ecosystem cooled down and the halving event, inefficient miners have had to quit or suspend mining, causing Bitcoin’s hash rate to drop to the level at the end of 2022. However, many analysts believe that this is a bullish sign.
After completing its fourth halving in April this year, Bitcoin’s block reward for miners was reduced from 6.25 BTC to 3.125 BTC. Although the Bitcoin Rune protocol once allowed miners to earn substantial transaction fees, with the decline of the protocol, the average contribution of transaction fees to miners is now less than 2 BTC per day. Miners who have not upgraded their mining efficiency have had to quit or suspend mining.
In mid-June, QCP Capital stated that this phenomenon of miners being forced to sell coins is the main reason limiting the rise in Bitcoin prices.
The decline in Bitcoin’s hash rate reflects the surrender of miners. Currently, the global hash rate of Bitcoin is 556.16 EH/s, a decrease of 7% in the past 24 hours. According to CryptoQuant data, Bitcoin’s hash rate has dropped to the lowest level since December 2022.
Over the weekend, Ki Young Ju, the founder and CEO of CryptoQuant, also agreed with a netizen’s view that the surrender of small miners is a bullish sign and is usually a characteristic of a bull market. Market analyst Will Woo echoed this statement, explaining that Bitcoin’s price will rebound after weaker miners surrender and network hash rate recovers. The withdrawal of Bitcoin’s hash rate has now reached historical lows, so the hash rate may gradually recover, accompanied by a rebound in the price.
With the Bitcoin ecosystem cooling down and the halving event, Ki Young Ju recently answered a question about the situation of mining companies from the perspective of production costs, stating that the decrease in hash price since the fourth halving in April has put tremendous pressure on inefficient miners. As inefficient miners are gradually eliminated, the mining cost of Bitcoin has decreased, and miners who are still operating may not be eager to sell their Bitcoin for operating capital.
CryptoQuant data shows that the withdrawal amount from miner-related wallets decreased by 85% from over 50,000 BTC per day to less than 10,000 BTC on the 28th, indicating a weakening selling pressure from miners, which also supports Bitcoin’s price.
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