CryptoQuant Report Signals Bitcoin Miner Capitulation as Revenue Drops Post-Halving

Bitcoin mining stocks are plummeting as miners face reduced revenue following the recent halving, with signs of miner capitulation suggesting a potential bottom in Bitcoin prices, according to a report by CryptoQuant.

Indicators of Miner Capitulation

Miner capitulation occurs when miners halt operations or liquidate Bitcoin reserves due to financial pressures. Historically, this often coincides with significant Bitcoin price bottoms. CryptoQuant reports a 7.7% drop in the Bitcoin network’s hashrate post-halving, marking the largest decline since the FTX collapse in December 2022. This decline indicates reduced profitability is causing some miners to shut down.

Financial Strain on Miners

The CryptoQuant report highlights the severe financial strain on miners, exacerbated by lower Bitcoin prices, reduced block rewards, and a collapse in transaction fees. Miners’ reserves have fallen to 1.90 million BTC, the lowest since February 2010. This trend reflects increased miner outflows, with daily outflows at their highest levels since May 21.

Changing Strategies

To cope, some miners are selling reserves or using them to earn yield or hedge against Bitcoin exposure. The average mining revenue per hash, or hashprice, remains near all-time lows, further intensifying financial difficulties and pushing more miners toward capitulation.

Implications for Bitcoin Prices

The signs of miner capitulation suggest the Bitcoin market may be nearing a bottom. Historically, when miners sell their reserves, it reduces selling pressure, potentially setting the stage for a price recovery. The current indicators, including a declining hashrate, increased Bitcoin outflows, and low hashprice levels, point to a critical juncture for Bitcoin prices.