Bitcoin Miners Show No Signs of Capitulation Despite Declining Mining Revenue

Ki Young Ju, the CEO of CryptoQuant, reported the challenges that Bitcoin miners face following the halving of BTC. He noted that the miners haven’t shown any signs of capitulation despite the decline in Bitcoin mining revenue.

Notably, the mining revenue has plummeted to hit 14-month lows after the BTC halving event in mid-April.

Miners Could Either Capitulate or Wait For A Price Surge

In an April 30 tweet, the CryptoQuant CEO said mining revenue has slipped to low levels not recorded since February 2023 after halving.

#Bitcoin miners’ revenue has dropped to levels seen in early 2023 following the halving.

Now they have two options: 1. Capitulation, or 2. Waiting for a rise in $BTC price.

There are no signs of capitulation for now. pic.twitter.com/8GrYk7zcN1

— Ki Young Ju (@ki_young_ju) April 30, 2024

The recent Bitcoin halving reduced block rewards to 3.125 BTC from 6.25 BTC, slashing mining revenue by half. One would expect miners to capitulate or sell off some of their Bitcoin reserves to offset bills. However, miners still maintained a neutral stance amid the decline in revenues as they held onto their crypto holdings. 

According to Ju, miners now have two options. They could either capitulate or wait for an increase in Bitcoin’s price to cover their expenses.

Ju stated:

“Now they have two options: 1. Capitulation, or 2. Waiting for a rise in BTC price.“

Also, the CEO mentioned that miners show no signs of capitulation presently. He supported his assertion with a reference to the 365-day Puell Multiple Chart, a metric used to determine miners’ level of sell pressure.

Usually, Bitcoin miners will capitulate as the price of the primary crypto token drops. In such situations, the less effective miners will retract from mining as their earnings won’t cover their mining costs.

Moreover, such miners may end up selling off their BTC reserves, creating more decline in the token’s price.

Meanwhile, Bitcoin mining revenues skyrocketed to hit over $100 million immediately after the BTC halving event. Moreover, 75% of the revenues came from fees.

Runes Protocol degens and rare Satoshi hunters paid heavily as they dragged for space on the first mined blocks post-halving. However, the demand for these new Bitcoin-based assets has dwindled in the past weeks, coupled with lackluster price performance across the broader crypto market. 

Bitcoin Deviates from Many Expectations Post-Halving

Unlike previous halving cycles, BTC reached a new all-time high of $73,750 in mid-March before the halving. Many anticipated more price rallies post-halving, but things have deviated from expectations. 

The crypto market has witnessed a notable price decline in the past week, with Bitcoin leading the downtrend and altcoins trailing closely behind.

As of 05:35 AM EST on May 1, Bitcoin trades at $57,272, reflecting a drop of 7.41% over the past 24 hours. Bitcoin is now over 22% down from its March 14 ATH of $73,750.

Additionally, Hashrate Index data revealed that Bitcoin’s hash price has declined to an all-time low of $46.55, a 74% decline from its post-halving peak. In context, the hash price is the daily estimated value of each tetrahash of hashing power.

With the declining mining revenue, market data provider The Bitcoin Layer says miners face an increased risk of capitulation. If the price of Bitcoin continues to fall over the next few weeks, big miners might have to liquidate some of their holdings to stay afloat.