Bitcoin Mining Companies' Revenues Are Falling, But They're Not Selling Their Assets – What Does This Mean Historically?
Cryptocurrency analytics firm Alphartal has provided an interesting analysis of the Bitcoin mining sector.
The report highlights that miners are not selling off their Bitcoin holdings despite historically low profitability.
Overall transaction fees on the Bitcoin network have fallen to their lowest level since 2012. This is because activity on the network has been extremely low this cycle, which has significantly reduced miners' income.
Despite the recent decline in hashrate, no adjustment to network difficulty has been recorded yet. This delay further narrows miners' margins and slows down the process of reaching balance on the network.
The Bitcoin network is experiencing the largest hashrate fluctuations in its history. This is believed to be due to some major mining companies shutting down their ASIC devices, citing falling revenue and decreased demand for the network.
Despite the challenging mining conditions, the fact that miners have not yet sold off their reserves is seen as a positive sign. According to Alphartal, some mining pools may have reduced their activity in line with the decline in global network usage. With Bitcoin trading above $107,000, miners are believed to be redistributing their computing resources based on current demand.
According to the analytics company, in previous cycles, miners typically sold their holdings during periods of rapid price increases and increased network activity. However, both of these factors are currently at low levels, which may indicate that the market is going through a period of “correction” rather than “capitulation.”
*This is not investment advice.
Source: cryptonews.net
