Bitcoin Miner Capitulation Hits Levels Seen During FTX Collapse
Bitcoin miners are facing significant economic pressures, resulting in a major “capitulation” similar to the levels seen during the FTX exchange collapse in 2022. According to Oluwapelumi Adejumo of BeInCrypto, the Bitcoin mining hashrate has dropped by 7.6% this month. This decline follows Bitcoin’s recent halving, which cut miner rewards to 3.125 BTC, according to Beincrypto.
Miner capitulation occurs when operational costs, including electricity and hardware, exceed the revenue from mining Bitcoin. In response, many miners are shutting down their operations. CryptoQuant data shows this trend, with Bitcoin mining hashrate mirroring levels from the 2022 FTX collapse.
Additionally, reduced network activity has significantly cut miners’ revenues. Daily Rune transactions have plummeted from a peak of over 753,000 on April 23 to 21,861 on June 29, marking a 90% decrease. Consequently, total miner earnings from Rune transactions have fallen below 2 BTC this past week, down from over 1,000 BTC on April 20.
Facing these challenges, miners have intensified their selling activities. Last week that miners offloaded approximately 30,000 BTC, valued at $2 billion.
To diversify revenue streams, miners are increasingly turning to artificial intelligence (AI) and other Proof-of-Work (PoW) assets. Companies like Core Scientific and Hut 8 have secured significant funding for AI expansion. Marathon Digital, the largest BTC mining company, has announced its entry into mining Kaspa, a PoW project, having mined 93 million KAS, valued at approximately $15 million as of June 25.
