Bitcoin is Struggling as Miners Cover Expenses

Recent macros reveal that the Crypto market is still struggling for support as miners selling pressures intensify with lackluster institutional demand and stiff crypto regulations coming to play.

At the time of drafting this report, the pioneer Crypto kept struggling around the $35k price levels on the FTX exchange with a daily trading volume of about $35 billion. Bitcoin presently has a market value of $643 Billion.

Bitcoin bulls seem to be suffering from exhaustion relatively as mining hash-power continues to plunge off the blockchain during the largest migration of Bitcoin miners in history.

Market pundits estimate about 90% of China’s bitcoin mining capacity will be shut down with the Sino- country contributing about 65% to 75% of all global bitcoin mining.

With the biggest migration of Bitcoin hash-power coming to play, crypto pundits have weighed on its implication, particularly at what extent Bitcoin miners sell pressures might cause a significant number of ripples in Bitcoin prices.

Recent macros suggest that the increased selling pressures from Bitcoin miners are on the basis they post a sudden decline in revenue to the recent 50% mark-down in Bitcoin prices leading to more Crypto assets sold to cover their fiat denominated charges.

Expenses such as Logistics costs and risk incurred by Bitcoin miners trying to relocate from China or sell off some of their hardware like mining equipment necessitated liquidation of the pioneer Crypto assets held in their reserves.

Market commentators further pre-empt such costs are likely to be ongoing for some months.

Data collated from Glassnode reveal the Bitcoin mining market has witnessed an estimated 65.5% decline in revenues since levels sustained in the month of March and April.

The 7-day average Bitcoin mining revenue presently stands at around $20.7 million/day, which in the background is still 154% higher than it was at the time of the back-to-back halving recorded last year.

Meanwhile, owners of small hydroelectric power plants in the world’s second-largest economy are trying to offload their assets now that demand for cheap power is drying up amid the sudden and swift clampdown on Bitcoin miners by Chinese regulators.

A significant number of these power generating plants are from Sichuan province, a key Chinese Bitcoin mining hub known for having abundant water resources that can provide cheap electric power.

Such narrative has weighed negatively on the flagship crypto with Beijing taking a tough stance against cryptocurrencies, regarding them as speculative, unstable, and possessing high systemic risks.