Although people see Bitcoin (BTC) mining as the key to getting rich the easy way, it’s actually not the case. Assuming the standard electricity prices of a single BTC mining and the latest mining hardware, its approximate cost is estimated to be in the $ 7,500-8,000 range.
With the collapse on March 12, the price of Bitcoin fell below $ 5,500 or even $ 3,600 and is traded at $ 5,411 at the time of writing. Current prices show that miners are largely at a loss.
According to the data of Blockchain.com, the hashrate, which has registered a record last week, fell 30 percent due to the impact of the price collapse. This is a clear indication that miners are starting to withdraw from the market due to high costs.
The Hash Ribbons indicator, which follows the moving averages of Hashrate, gives a “miner capitulation” signal, which means that miners who are crushed under costs are on the verge of turning off mining devices, which is a matter of time in the current situation.
Hash Ribbons coming in hot for another Miner Capitulation.
Currently a 1 week data delay so crossover may have already occured…the #Bitco pic.twitter.com/upektfzejx
– Charles Edwards (@caprioleio) March 14, 2020
To better understand the importance of miner capitulation, it is enough to look at the graphic shared by investor and financial expert Preston Pysh from his Twitter account. As you can see from the chart shared by Pysh, the indicator gave a signal at the end of 2018 and the price of the biggest crypto money decreased from $ 6,000 to almost $ 3,000 with a decrease of almost 50 percent. In addition, Bitcoin price dropped 20 percent shortly after the last miner’s capitulation in late last year.
Potential miner capitulation at a hash rate cross.
Great chart by @caprioleio. the #Bitco pic.twitter.com/fbmwrrzhxf– Preston Pysh (@PrestonPysh) November 14, 2019
It will not be wrong to say that Bitcoin price will continue to decrease if history repeats and miner capitulations occur. However, when miners start spending resources to secure the network once again, the price of the cryptocurrency will perhaps gain a hundred percent value, but it is too early to talk about it.
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