- Mining of bitcoins has become more difficult than ever with the activity now standing at 92 trillion.
- Miner revenues have gone down drastically as a result of 2024 halving from the previous $72.4M to $25-30M.
- Miners sold more than 30 000 BTC which is equivalent to $1.71 bln for 72 hours which could have influenced the Bitcoin price.
Bitcoin miners are struggling with a rise in mining difficulty and a steep drop in income, which has led to some of them dumping their bitcoins. According to data, the mining difficulty of Bitcoin has set a new high (ATH) with a 3.6% increase to 92.67trillion.
This is because more people are involved in the process of mining or the validation of transactions in the Bitcoin network. However, an uplift in operating expenses and a decrease in mining incentives have threatened the profitability of miners who have resorted to selling their assets.
Surge in Mining Difficulty Amid Declining Revenue
Many Bitcoin miners have persistently incurred higher operational costs including the cost of electricity and maintenance of the mining equipment. Thus, the enhanced mining difficulty is now making it difficult for most miners to survive. As per the Mempool data, the difficulty adjustment got to a block height of 860,832, hitting a record of 92.67 trillion ATH. This level is higher than the previous record of 90.67 trillion that was set in July; thus, presenting a new record that miners have to achieve.
This has been made worse by the April 2024 Bitcoin halving which saw block rewards decrease from 6.25 BTC to 3.125 BTC. Therefore, miners’ revenues have decreased greatly from $72.4M down to a range of $ 25 million to $30 million only. This resulted in a decline of revenues complemented by increasing costs that forced miners to exit the market.
Miners Selling Off Holdings to Cover Costs
On-chain analyst Ali Martinez noted that Bitcoin miners sold more than 30,000 BTC, which is worth approximately $1.71 billion, in 72 -hours alone. This massive sell-off might be attributed to the financial troubles that miners are experiencing with the rising difficulty and decreasing revenues.
With such developments, some analysts fear that the increase in the number of miners selling their bitcoins can exert negative pressure on the price of the digital currency. When prices operate below this scope, there are high probabilities that more miners will be compelled to sell, therefore affecting prices.
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