Due to the current global financial crisis that has encapsulated even the cryptocurrency ecosystem there have been many issues to deal with. In the Bitcoin space, the mining arena is one such area that has become one to watch as even with the reward halving less than 50 days away, there is an expected large mining difficulty drop coming.
The rapid fall in Bitcoin’s price has a lot to do with this sudden change in heart form the mining community which was cruising along, even raising the hash rate to new heights this year. However, the hash rate has fallen off dramatically — more than 40 percent — but the fears of miner capitulation seem to have abated.
The recent price rebound certainly has helped keep miners interested. The coin managed to recoup 90 percent of its losses, but has fallen back a little to a still manageable level of the mid-$6,000s. And, there is data to suggest that the fall in hash rate was not entirely down to miners falling away due to low levels of profitability.
Miner balance stays high
According to an executive at Token Analyst, the fall in the network’s hash rate was not due to miners capitulating. In the analysis, it was found that even as the hash rate went down with the price of Bitcoin, the actual amount of BTC held by miners stayed relatively constant.
This data seems to suggest that the major mining pools were not willing to hash out before the halving in less than two months time. Miners will be all too aware that a price dump could also come after the halving comes in. It was also seen that after the fall in price, the Bitcoin miners energy ratio was also increased dramatically in order to increase the hash rate somewhat.
Positives signs from miners
It could be argued that this unexpected price drop from Bitcoin had the miners spooked a little, but they have handled the fall well and are still driving towards the mining reward halving even which is key to how they continue their operations going forward.
A full capitulation seems to be long gone with the price climbing back up to manageable levels, and when the difficulty does adjust, and mining becomes easier again, there will be a better platform for miners to drive from again towards the halving.