Increasing operating costs and reduced rewards negatively impact Bitcoin miners.
According to cryptocurrency analyst James Check, “The operations are dying.” However, they have not reached catastrophic levels. In a video clip, Check explains that as of January 14th, block mining on the BTC network is now slower by about X seconds compared to usual, indicating a decrease in hash rate.
He estimates that currently about 5% of miners are struggling. While this percentage is sensitive, it is not excessively high. Experts suggest that miners may allocate some assets, but not sell off completely.
The recent halving event on Bitcoin on May 20 reduced mining rewards from 3.125 BTC to X BTC, leading to a decrease in hash rate as some mining companies shut down unprofitable operations.
Despite serious FUD, Bitcoin network transaction activity continues to grow.
Facing challenges, Checkmatey believes miners are likely operating on the edge of profitability. They mine new Bitcoins primarily to cover operating costs. He states that miners are in a unique position where they are neither completely surrendering like in a bear market, nor thriving.
Check also emphasizes that transaction fees are becoming an increasingly important part of miners’ income. This shift forces the mining industry to innovate and manage capital more efficiently.
Matthew Siegel, Director of Digital Assets Research at VanEck, noted that while most Bitcoin miners sell off 100% of their assets, some miners (such as CLSK) manage to hold onto BTC and use the balance to acquire new capacity.
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