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More Bitcoin Miners Expected to Capitulate Before BTC Halving. Here's Why

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Tue, 03/31/2020 - 14:22
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Alex Dovbnya
The fact that Bitcoin (BTC) miners are capitulating on the verge of the halving is 'concerning,' according to a new CoinMetrics report
More Bitcoin Miners Expected to Capitulate Before BTC Halving. Here's Why
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In spite of the second-largest negative difficulty adjustment in Bitcoin's entire history, more Bitcoin miners are likely to call it quits, according to a new State of the Network report released by cryptocurrency research company CoinMetrics.  

Related
Bitcoin (BTC) Miners May Start Quitting, Expect Hash Rate to Drop: Crypto Manager

Miners are in a dire predicament 

The 44 percent hashrate plunge signals that plenty of inefficient miners have already been backed into a corner due to the historic price drop that took place on March 12.

The mining industry is currently in a very precarious position, with the third halving expected to happen in just 43 days. Moreover, Bitcoin Cash (BCH) and Bitcoin SV (BSV) are going to have their supply cuts in early April, which means that their miners will flock to BTC to collect higher rewards. This will increase Bitcoin's mining difficulty, thus putting even more pressure on smaller players who are no longer able to break even. 

Bitcoin Cash, Bitcoin SV
image by coinmetrics.substack.com

Related
98 Percent of Bitcoin (BTC) Mining Rigs to Become Obsolete

The strongest will survive 

It appears that even major mining firms (not just individual miners) are not immune to the sell-off that was prompted by the COVID-19 pandemic. Shortly after 'Black Thursday,' U.S. company Digital Farms indefinitely stopped its cryptocurrency mining operations due to the sharp Bitcoin price drop. 

CoinMetrics states that only the most efficient miners will survive the ongoing capitulation, benefiting from increasing profit margins. Eventually, this could trigger another crypto rally. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.