Bitcoin miners are experiencing a significant revenue decline, returning to levels last seen in early 2023. This downturn follows the recent halving event, a pre-programmed reduction in the block rewards miners receive for adding new transactions to the blockchain.
According to King Young Ju, CEO of CryptoQuant, miners are now faced with two potential paths: capitulating by selling their bitcoin holdings or holding out for a possible rise in the price of bitcoin. Currently, there is no evident trend towards capitulation among miners.
Current Market Outlook
Kaleo, a noted cryptocurrency analyst, pointed out that the current market behavior aligns with patterns observed in previous cycles. Historically, a period of lateral trading typically follows a halving. This suggests that the current situation could be a standard market adjustment post-halving.
The halving effectively halved miners’ revenue from the same price levels just a few weeks prior. Miners incur substantial costs, including electricity, hardware maintenance, rent, and payroll, to secure and validate blockchain transactions. Their earnings are derived from the newly minted Bitcoins, which they earn from block rewards and transaction fees.
