Bitcoin's weak performance may have led to the hoarding mentality, and miners might dump a big portion of their holdings in the next bull run.
As is well known, miners are responsible for creating new BTC tokens and bringing them into circulation. Miners depend on fiat currencies to meet their machine and electricity expenses and hence frequently liquidate their holdings.
However, Bitcoin has remained rangebound over the last month and a half. Since the market rally in June, the king coin has wiggled in a small range of $29,000-$31,000, according toSource: CoinMarketCap The underwhelming performance may have strengthened the hoarding mentality, and miners might look to offload a greater portion of their stashes during the next bull run.Bitcoin miners have been having it rough for the past few months. The total revenue – a combination of block subsidies and transaction fees, has went downhill since the BRC-20 frenzy in early May.
BTC’s weak price action drove away users from the blockchain, causing a significant decline in network traffic and in turn, fees generated from transactions. Having been battered by the punitive crypto winter of 2022, these developments added to miners’ miseries.Moreover, the above chart revealed a significant drop in the 7-day average of the hash rate over the last month. The fall in profitability could have possibly led to the exodus of less efficient miners.
Overall, the decline in miner revenue and hash rate were alarming developments for the Bitcoin network. Not only do they disincentivize mining, but the subsequent exodus of miners could compromise the blockchain security.$29,032.91, recording marginal gains in the 24-hour period.
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