Bitcoin miners are facing challenges due to rising operational costs and decreased rewards, but the situation is not yet catastrophic, according to a cryptocurrency analyst. James Check, also known as “Checkmatey,” explained in a video that there is currently a hash ribbon inversion, resulting in slower block times and a decrease in hash rate. He estimated that around 5% of mining hashrate is struggling at the moment. However, Check believes that this is not a significant issue and that miners are likely to be selling some of their holdings rather than engaging in a complete firesale.
A hash ribbon inversion occurs when the 30-day moving average of the hash rate falls below the 60-day moving average, indicating a period of mining difficulty. This can be attributed to factors such as higher operational costs, a decline in Bitcoin’s price, or equipment problems.
Following the Bitcoin Halving on April 20, the hash rate of the Bitcoin network started to decline as mining firms shut down unprofitable rigs. The halving event, which occurs every four years, reduces miners’ rewards by half. In this case, mining rewards were reduced from 6.25 BTC to 3.125 BTC.
As of now, the Bitcoin network’s hash rate is 586 exahash per second (EH/s), a 2% decrease in the past 30 days, according to Blockchain.com data. Check suggested that while miners may be struggling to break even, they are likely to cover their operational costs by mining new Bitcoins.
It has been observed that Bitcoin miners are selling most of their coins to pay their expenses. Transaction fees are becoming a significant portion of their revenue, and miners need to adapt to this situation. Some analysts have also noted that miners are selling 100% of their coins, while others are managing to hold onto their Bitcoin and use their USD balance sheet to expand their mining capacity.
In conclusion, Bitcoin miners are facing challenges, but the situation is not dire. They are adjusting to the changing dynamics of the industry and finding ways to cover their operational costs while still mining new Bitcoins.