Why Bitcoin miners’ gloomy season is over – Crypto News – Crypto News
Connect with us
Why Bitcoin miners' gloomy season is over Why Bitcoin miners' gloomy season is over

Cryptocurrency

Why Bitcoin miners’ gloomy season is over – Crypto News

Published

3 years ago

on


  • Two stocks of certain Bitcoin mining firms are outperforming BTC.
  • While it’s not jubilation season for miners, short-term holders remain enthusiastic about the coin price.

Bitcoin [BTC] Miners may have faced a challenging period, as several factors, including regulatory crackdowns and concerns over environmental impact, have created a long season of distress for the industry.

However, there are indications that this murky period may be nearing its end, with some mining stocks showing signs of strength and resilience.

According to IntoTheBlock, stock prices of the Mathent Patent Group and Riot Blockchain have outperformed BTC on a Year-To-Date (YTD) basis.

Now higher than BTC

As of June 1, Bitcoin’s performance rose 64.57%. Riot recorded a 253.98% increase while Mathent’s stock value increased by 186.26%. Consequently, it has pegged BTC back as the best-performing digital asset of the year — a title it once held.

One reason for this turnaround is the increased revenue and fees that miners have recorded recently. This could be connected to the adoption of Bitcoin Ordinals.

Surely, the rise of BRC-20 token also had its impact since the number of transactions and minting on the Bitcoin blockchain also increased. It is noteworthy to mention that the factors highlighted above were not the only ones that have boosted the mining sector.

Rather, some of the mining firms have also taken steps to address the environmental concerns associated with the activity. This has resulted in the adoption of greener and more sustainable practices.

Not only does this help mitigate the negative environmental impact, but it also improves the public perception of the industry.

Security and the loophole signs

Interestingly, Glassnode data showed that the Fee Ratio Multiple (FRM) had decreased to 19.38. The FRM, calculated as the ratio of the total revenue and transaction fees, serves as a measure of the blockchain’s security when blocks disappear.

Source: Glassnode

Since Bitcoin’s FRM was low, it means that the asset could maintain its security budget via miners’ revenue without depending on inflationary subsidy. Conversely, if the FRM was high, then miners would require block rewards subsidies to maintain revenue.

However, indications from the hash ribbon revealed that the worst was not yet over for the miners. The metric uses the 30-day Moving Average (MA) to measure miners’ capitulation and identify buying opportunities.

When the hash ribbon switched from light red to dark red, then capitation could be considered over. But as of this writing, it was not there yet.

Bitcoin hashrate

Source: Glassnode

Short-term holders yearning for more have a chance

Meanwhile, the same metric indicated that Bitcoin may have offered a good buying opportunity, This was because the hash ribbon had entered the white-colored zone, indicating a price momentum switch from positive to negative.

Is your portfolio green? check the Bitcoin Profit Calculator

Additionally, short-term holders still yearned for a BTC uptick despite its recent decline from its Q1 performance. According to Crazzyblockk’s CryptoQuant publicationthe equilibrium level of the Spent Output Profit Ratio (SOPR) suggested the conclusion mentioned above.

Bitcoin short term holders SOPR

Source: CryptoQuant

Used as an indicator of macro market sentiment, the SOPR reflects the degree of realized profits and losses moved on-chain. The analyst noted,

“These holders have shown a desire to be profitable and remain in the market, and the ‘equilibrium level’ of SOPR data has recovered and improved every time it approaches and moves below the number 1 level, and we can say that these players still have interest and hope for price growth.”

Related Topics:
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending