Miner Capitulation Pressures Bitcoin Price

An excerpt from Bitcoin Magazine's Deep Dive: How Bitcoin Miners' Capitulation Drives Bitcoin Price Down. Below is an excerpt from the latest issue of Deep Dive, Bitcoin Magazine's premium markets newsletter. Sign up now to be one of the first to deliver these insights and other on-chain bitcoin market insights straight to your inbox. For those unfamiliar with how the hash rate is calculated, the Bitcoin network targets block times of 10 minutes and has a difficulty setting every 2,016 blocks (roughly every two weeks). If it arrives 5% faster than the average 10 minutes during a block time of 2,016 blocks, the difficulty level will be adjusted upwards and vice versa. So when the hash rate drops, it means that blocks arrive slower than the 10-minute target, which means miners stop their activity (for a couple of reasons). The bitcoin network hashrate has dropped by about 27% since May 15, as a combination of the mining ban in provinces in China and a massive drop in the price of bitcoin caused many operations to temporarily shut down their machines. There are bitcoin miners all over the world that have broad break-even costs due to the energy cost and efficiency of the miners. When mining is no longer economical for miners, they simply shut down their machines until conditions become favorable again (or until the machines are completely reassigned to another jurisdiction with a cheaper energy source). The miners' total earnings fell from $68,018,448 daily on May 10 to $31,119,504 daily on June 17. With revenues falling by more than 50% in just over a month, miners' profitability has come under serious pressure, which undoubtedly makes it harder. Downside pressure on bitcoin price. Learn more about how this pricing edition works and other critical market factors in this full edition of Deep Dive.

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