Why Bitcoin Miners May Be on the Verge of ‘Losing Everything’
Bitcoin [BTC] miners may be within an ace of capitulation due to the incessant increase of the hashrate. This was opinion by CryptoQuant, the chained cryptoanalysis platform.
However, the BTC hashrate was not the only one involved in posing a risk.
Well, not to forget, the hashrate acts as computing power for the mining process.
Here is AMBCryptos Bitcoin price prediction for 2022-2025
At press time will BTC hash rate was at an All-Time High (ATH) of 261,576,490,591.99 per second. This data was according to CryptoQuant.
Likewise, the mining difficulty of the coin was extremely high from the point it was on October 9 when it reduced.
Source: CryptoQuant
All risk, less reward
Allegedly, the increase in mining difficulties could lead to further declines in miners’ incomes and profits. With the current state, miners can find it challenging to get out of the falling income conditions.
As lower profitability is in full force, CryptoQuant noted that Bitcoin miners could experience worse than 80% year-on-year (YoY) reduction. CryptoQuant further stated,
“In this situation, the amount of miners made from each hash fell to the lowest level ever, falling by more than 80% compared to the previous year. In the current market environment, miners are paid quite low, which could lead to another miner-related capitulation. “
Source: Glassnode
A look at BTC miners’ earnings showed that there had been a massive decline since the last day of September.
This situation suggests that miners are increasingly finding it difficult to remain profitable. According to Glassnode, miners revenues which was about 1,058.09 on October 10, had fallen to 908.54 at press time.
Bitcoin miners also saw more downside as block rewards fell to 893.75, especially as the number of blocks mined appeared to be in freefall.
Glassnode data knew that BTC blocks mined as of October 10 was 171. However, the difficulty of mining brought the daily number of blocks mined to 143 as of October 13.
Source: Glassnode
Is there a way out?
Considering the slowdown, Bitcoin miners expect a quick fix to be around the corner. However, situations like this may not go away anytime soon.
At the time of writing BTC was trade to $19,764. While the royal coin may have regained its $380 billion market cap, miners may demand much more than a minimal revival in their quest for better rewards.
A high asset price may not be the only guaranteed way out, as cheaper electricity, efficient hardware and an improved mining pool may also play a role.
On the other hand, crypto exchange, Binance wants to help miners. In its October 14 release, Binance noted that it was supporting the Bitcoin mining industry with a $500 million lending project. As such, this development could help reduce the pressure on the BTC mining community.
