Potential Bitcoin Miner Capitulation Looms as Hash Rate and Market Value Falls, Reports Standard Chartered

By: Isha Das

Bitcoin's Market Struggles

Recent analysis indicates a potential 20% decrease in Bitcoin's hash rate post-halving with previous data showing significant hash rate corrections of 39%, 11%, and 26% in 2012, 2016, and 2020, respectively. Currently, a 6% decline has been observed for 2024, reducing the hash rate from 649 eh/s to 619 eh/s.

The cost of Bitcoin has fallen from around $73,500 to below $57,000, triggering additional predicted hash rate drops. The measure of the expected daily value of 1 TH/s of hashing power, the "hashprice" metric, now resides at a five-year low of $0.045 per terahash/second per day.

Potential for Certifiable Miner Capitulation

If these trends continue, the cryptocurrencies industry could experience a miner capitulation event, where the cost of Bitcoin mining surpasses its profitability. These events are usually marked by the hash ribbon metric, which has traditionally indicated periods of bottoming in Bitcoin cycles. With the following difficulty adjustment set for May 8, predictions suggest a 1.5% to 2% decrease.

Reports from reputable British firm, Standard Chartered, support these predictions by stating that the largest cryptocurrency still has room to fall further, potentially reaching a low of around $50k. If Bitcoin trading continues below the average spot ETF purchase price of about $58K, it could trigger widespread liquidations, exacerbating the problem.