Bitcoin Miners Diversify Amid Rising Costs

Bitcoin mining companies are shifting to other cryptocurrencies due to the rising costs of operations, says CryptoQuant CEO Ki Young Ju. Bitcoin’s hashprice has reached an all-time low. This decline has slowed investments in Bitcoin mining rigs and pushed some companies to explore mining other, cheaper proof-of-work (PoW) coins, according to Dailyhodl.

Ju highlights that this move is not a sign of long-term bearish sentiment but rather a hedge against current market uncertainties. He notes, “Bitcoin hashprice hit an all-time low. Many mining companies slowed mining rig investments, with some switching to other PoW coins to hedge against market uncertainty… This doesn’t mean the end of the cycle. And they’re not long-term bearish; they’re just hedging and waiting for buy-side liquidity to recover, in my opinion.”

Despite the shift, this trend suggests a capitulation phase among miners, a common precursor to a Bitcoin bull run. As of now, Bitcoin is trading at $60,681. 

Additionally, Ju observes that Ethereum’s Market Value to Realized Value (MVRV) indicator suggests the beginning of an altseason. The MVRV indicator measures the market capitalization of a crypto asset relative to its realized capitalization. Ju notes, “We’re entering early altcoin season. ETH MVRV is rising faster than Bitcoin (BTC) MVRV, suggesting ETH market is heating up relative to its on-chain fundamentals. Given the current ETF situation, this might be an ETH-only season. Historically, when ETH surges, other altcoins tend to follow.”

Currently, Ethereum is trading at $3,360, with the market keenly observing the shifting trends in the cryptocurrency landscape.