Ever since the adoption of SegWit (a new Bitcoin code upgrade), many of the major Bitcoin mining pools (which control about 80% of the network hash rate and are responsible for the majority of Bitcoin transactions) have now started reporting their earnings to the public. These earnings have shown that those mining pools are now taking a profit of billions of dollars every month. In fact, the profitability of Bitcoin mining continues to grow, thanks to SegWit, which now allows for faster transaction confirmation times.
The estimated number of Bitcoin miners has dropped to an all-time low, due to a recent profit boost, according to data provided by blockchain analytics firm Bitmain.
The profitability of Bitcoin mining continues to fall. At this time, there are only 1670 active Bitcoin miners. They have generated a total of about 30.1 billion USD as revenue. While these miners will continue to earn Bitcoin, they are no longer the ones to sell them.. Read more about what is mining bitcoin mean and let us know what you think.Bitcoin (BTC) miners are unlikely to drive up the price of BTC by selling coins in the coming weeks, new data shows.
In its latest weekly Chain Week report, analytics source Glassnode sought to allay fears of another big sell-off in mining stocks.
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The ongoing transfer of mining equipment – and therefore bitcoins – from China has raised fears that miners are selling BTC to cover costs and move into liquidation.
Given the magnitude of the geographic shift – the China debacle was the largest hash rate shift in history – miners could increase selling pressure by dumping coins that may not have moved for a while.
The combined impact of the sell-off and the falling hashtag represents a double whammy for bitcoin price action, reducing the potential for growth or even sustained strong support levels.
Annotated graph of the bitcoin miner’s wall scale. Source: Glassnode
However, for Glassnode, the situation seems to be already under control. Miners are on the move, the publication said, and those who are still online are poised to make a lot of money.
Later this week, bitcoin’s complexity will drop by nearly 25 percent – the largest drop ever – meaning that mining bitcoin will become more profitable for the remaining miners.
Thus, there should be less incentive to sell as network members are in a virtuous cycle of profitability until the lack of hash returns and complexity increase.
The bitcoin mining puzzle has become 23.6 percent more difficult, although revenue has increased an average of 154 percent in seven days, the report said.
Since a very large portion of the hash capacity is currently offline and in transit, the next complexity adjustment is estimated to be -25%. Therefore, unless the price continues to adjust or hash capacity migrates again, miners who continue to work will likely become even more profitable in the coming weeks.
Glassnode added that miners are likely to liquidate coins accumulated over time as part of the move.
This essentially suggests that it is unlikely that established mining companies are engaging in excessive forced sales….. and it is therefore more likely that Chinese mining companies liquidating government bonds are the dominant source of sales, the report concludes.
On the other hand, another source highlighted how lucrative mining can be in the current context.
Related: World’s first bitcoin ETF earns $3 million a day as BTC price falls.
Using data that suggests bitcoin’s energy consumption is about 2,520 gigawatt hours over a two-week period of complexity, author Hass McCook pointed out the 75% profit opportunity miners can make at certain operating and capital costs.
If 1 BTC costs up to $20,000 to mine, the difference between this cost and the spot price, which was $34,500 at the time of writing, is obvious.
So if the cost of mining a coin is about $20,000 in the worst case (probably closer to $13-14,000 in professional shops), how hard would you work now to get more than 75% of the available profit?” concluded McCook.
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