MINING

Bitcoin Miners Suffer As BTC Long Term Holders Profitability Falls To DEC 2018 Bear Market

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Bitcoin Miner Balance Decreasing Ever Since The Price Fell below $24.5k, while long-term holders are selling BTC at an average loss of 42%.

Miner balance in the Bitcoin industry has experienced large outflows as the price of Bitcoin struggles below $20k.

Bitcoin’s price fall has caused problems for investors and miners. Individuals and companies have sunk millions of dollars into setting up BTC mining rigs in various regions.

Basically, Bitcoin network nodes operated by miners are responsible for keeping the network safe and secure. In this sense, a bad moment for miners could very well become a credible threat to the entire ecosystem. Recent data from Glassnode suggests that Bitcoin miners have been going through a rough patch for a while since the crypto market began a downward spiral at the start of 2022.

 

Miners Are Struggling To Break Even

Due to the current market hardships, Bitcoin mining is becoming less profitable than it used to be. For one, miners have to cover their operating costs before they can turn a profit. With the dwindling prices and increasing operating costs caused by inflation, breaking even is becoming difficult. Granted, this situation didn’t start yesterday. According to Glassnode, things started going south for miners when BTC’s price fell below $24.5k. Miners are now spending an average of 8,000 worth of BTC to cover operating costs.

Long-Term Holders In Jeopardy: Long-term profitability of Bitcoin holders is now in doubt amid the prolonged bear market.

Glassnode opines that this decline in profitability in 2022 mirrors that seen way back in December 2018. As a result, investors who have been HODLing BTC for a long are now facing a huge selling pressure that is forcing them to sell at a 42% average loss. They’re selling at the current low price after buying at an average price of $32k. Currently, Bitcoin is trading at around $19.3k and facing strong resistance at $20k. Interestingly, this is happening at a time when there are less than 2 million BTC to be mined.  Out of the total supply of 21 million, over 19 million Bitcoins have already been mined.

 

Can Bitcoin Recover

It’s worth noting that the BTC market is known to go through a market cycle switching between bears and bulls over a 4-year period that marks the market dynamics between any two halving events. As such, many people are still optimistic that the market will recover sometime in 2024.

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Traciwininger
Author: Traciwininger

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