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Here’s Why Bitcoin’s Latest Miner Capitulation Cycle Is Unique



Throughout the history of Bitcoin, a cycle of miner capitulation can be observed. Typically during good times, miners resort to holding BTC, thus reducing the supply of new coins, and raising the demand.

This drives up the general price trend. On the other hand, when times are not that good i.e, mining becomes less profitable or if BTC’s value shrinks or to unburden over-leveraged positions, miners are forced to sell off their stockpile.

Due to some of the biggest capital expenditures, lowest profits, and most unreliable infrastructure in the industry, BTC miners were particularly hard impacted during the 2022 bear market.

Mining has been more difficult than ever, and it has been one of Bitcoin’s shallowest drawdowns.

Some of the factors that played a role include multiple layoffs, bankruptcies, lawsuits, and other negative press that have battered one of Bitcoin’s most prominent sectors. 

During the month of May, publicly-traded Bitcoin miners like Marathon Digital and Riot Blockchain sold more bitcoin than they mined, according to an earlier report by Arcane Research analysts.

This is a sharp contrast to the first four months of the year when the same miners sold less than a third of their earnings.

However, this cycle’s been different, CoinShares Bitcoin research lead Christopher Bendiksen believes.

When you had a much less efficient capital market it was probably a lot less orderly and we saw that manifested previously as these big pullbacks in difficulty. That just hasn’t happened this time, even though we’ve had spectacular bankruptcies and a bunch of operations struggling.

Yet, businesses haven’t been turning off their machines lately, with the exception of a brief period caused by bad weather in the United States.

This made the most recent capitulation cycle distinct and provided additional insight into how the mining sector is rapidly changing, he added.

Bitcoin Miners Anticipate Price To Fall- Analyst

Meanwhile, crypto analyst and trader Ali Martinez recently took to Twitter to share his view on the recent BTC price plunge in relation to his recent tweet about Bitcoin miners selling BTC.

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Here’s Why Bitcoin’s Latest Miner Capitulation Cycle Is Unique 3

Martinez published a chart on March 2 that showed that over the previous week, Bitcoin miners had sold 3,835 of their remaining BTC, or around $88 million, according to the data. This led the expert to believe that miners were anticipating the top cryptocurrency to experience a steep price decline.

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