Profits rise, Bitcoin miners now have no interest in “unloading”

The impending decline in record difficulty means Bitcoin mining will become more profitable as the hash rate slowly returns to the network.

Bitcoin miners are “unlikely to put pressure on BTC prices by” dumping “in the coming weeks, new data said.

As part of its latest weekly report, The Week On-chain, analytical source Glassnode sought to allay fears of another major mining company being sold off.

Difficulty “giving gifts” to miners

With the ongoing transfer of mining equipment – and hence the Bitcoin hash rate – from China, concerns have arisen that miners are selling BTC to cover costs and liquidation.

Given the magnitude of the geographic change – the route in China marks the largest hash rate change in history – miners can create selling pressure by handling coins that may not move for a long time.

The combined effect of the sale and the falling hash rate provides “double profit” for the Bitcoin price action, reducing the likelihood of gaining or even maintaining significant support.

For Glassnode, however, the situation appears to be under control. Miners in transit and those still online are facing tremendous headwinds.

This is because the Bitcoin difficulty level will drop nearly 25% by the end of this week – again the biggest drop ever – meaning Bitcoin mining will become more profitable for the miners.

As a result, the incentive to sell will be less, as the network participants remain in an upward spiral of profits until the missing hash rate returns and the level of difficulty increases.

“Bitcoin mining puzzle 23.6% harder, despite sales growth of 154% on a 7-day average. Since a large percentage of the hash power is currently offline and on the go, the next difficulty adjustment is estimated to be -25%. As a result, miners who stay active are likely to make even more profits in the coming weeks, unless price continues to correct or pushes hash power back online.

Glassnode added that miners are more likely to liquidate funds over time as part of this move.

“This largely suggests that active miners are unable to conduct excessive forced sales … and therefore it is more likely that Chinese miners, who are liquidating the treasury, are the source of the expense. Distribute to the seller.”

Opportunity comes

Meanwhile, a separate source has highlighted how lucrative mining can be in the current circumstances.

Using data that puts Bitcoin’s energy consumption at around 2,520 gigawatt hours over two tough weeks, author Hass McCook highlights a 75 percent chance of profit for miners with certain activities and investments.

If the maximum cost to mine 1 BTC is $ 20,000, the difference between that expense and the spot price, which at press time is $ 34,500, is clear.

“So if the worst-case cost to mine a coin was around $ 20,000 (probably close to $ 13-14,000 for pro shops), you’d work so hard to make over 75% profit … ? ”

Synthetic

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