Cryptoquant: Bitcoin Miners Expand Capacity But Struggle to Stay Profitable

Bitcoin miners are expanding their hashing capacity, reaching new record highs despite ongoing challenges in profitability. This report from Cryptoquant Institutional Insights highlights that miners are selling off assets as they face diminishing profit margins and rising operational difficulties.

Bitcoin Miners Face Capitulation Amid Record-High Hashrate and Squeezed Margins

In the latest findings from Cryptoquant’s research team, Bitcoin’s network hashrate has hit an all-time high, even as the leading crypto asset trades at approximately $59,000, which is 19% below its peak value. The research report indicates that miner capitulation events are becoming more frequent, with miner outflows spiking to 19,000 bitcoin (BTC) on Aug. 5.

Source: Cryptoquant report.

This spike marked the highest level of outflows since March 18, as miners were pressured by operating profit margins dropping to 25%, the lowest since January 2024. Despite these challenges, miners continue to expand their hashrate capacity.

However, Cryptoquant’s Miner Profit/Loss Sustainability metric suggests that miners remain underpaid due to the increasing difficulty of mining and the low hashprice, which has reached a record low of $0.038 per terahash per second (TH/s).

Cryptoquant’s research team also observed that smaller miners’ holdings have stabilized, while larger miners have continued to accumulate BTC, with their total holdings now standing at 66,000 BTC. The report concludes that further miner selling may occur if current conditions persist.

Cryptoquant’s findings highlight that miner capitulation often signals local bottoms in bitcoin prices during bull markets, with past events observed in March 2023 and January 2024 following significant market corrections. Presently, at 9 a.m. EDT on Aug. 15, BTC is exchanging hands for $58,829 per unit down 3.6% over the past day.

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