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Underwater bitcoin miners are turning up the selling pressure on crypto

July 6, 2022
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Cryptocurrency miners have become sellers as Bitcoin prices have fallen so low that they are putting further pressure on the already depressed market. According to CryptoQuant, recent data show that the price of cryptocurrencies has fallen from $ 30,000 to $ 20,000, increasing the amount of Bitcoin miners have moved from their mining pools to crypto exchanges in June. Known as the “Minner’s Surrender,” this event means that the miner was preparing to sell Bitcoin. It has the potential to generate greater profits by covering mining costs or selling at prices that appear to be overvalued. Citi analyst Joseph Ayube said in a note on Tuesday: “Given the rise in electricity costs and the sharp drop in Bitcoin prices, Bitcoin mining costs could be higher than some miners’ prices. There is. ” “The attention-grabbing reports of resignations from mining companies and miners who used equipment as collateral to borrow money could put more pressure on the Bitcoin mining industry.” Bitcoin prices are the average mining cost. Below, miners who are not selling to finance their business may be forced to suspend or terminate them, ultimately degrading the security of the entire Bitcoin network. There is sex. However, Ayoub pointed out that there is still no evidence that the miners have shut down. According to Julio Moreno of CryptoQuant, miner surrender is also a historical indicator that the market has entered the lowest territory. Bitcoin fell to a low of $ 17,598.05 in June, according to CoinMetrics. Trading volume on Wednesday was around $ 20,000, more than 70% below November’s highs. Miners selling Bitcoin may continue to be a source of selling pressure if the price of Bitcoin with low mining and weak security remains so low. However, other miners may be forced to suspend or terminate operations, resulting in a lower hash rate for the network and ultimately less security for the network. Ayoub said the hash rate is stable for now. Hash rate measures the computing power that the Bitcoin network uses to process transactions and is an important indicator of the state of the network. When the hash rate goes down, the security of the Bitcoin network goes down, Ayoub said. The lower the hash rate, the less computing power is needed to control the hashing power of the network. This puts a malicious attacker at risk of launching a 51% attack, and the attacker You can prevent new transactions, reverse transactions, and double payments. Use coins. JP Morgan analyst Kenneth Warsington said in a note on Wednesday that several listed mining companies are targeting hashrate growth in June. “Inevitably and to maintain capital,” he said. “Bitcoin fell to the level last seen in December 2020, and operators running older (inefficient) mining hardware reduced operations,” he said. “The basket of 13 US-listed Bitcoin miners had a market capitalization of about $ 3.7 billion as of Thursday, June 30 (down about 45% in June).”

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