While some in the crypto community warn about the potential perils of Bitcoin miner capitulation, others point to Bitcoin’s current hash rate as evidence that those worries are unfounded.
Twitter user Hodlonaut, a self-identified “permabull,” pointed to the rate’s chart on Monday, telling his 17,000 followers that miner capitulation has been “canceled.”
Miner capitulation happens when Bitcoin mining ceases to be profitable. When miners sell off their holdings and turn off their rigs, it can accelerate a bear market.
Some crypto prognosticators say smaller miners may capitulate after the next Bitcoin halving, which cuts their mining rewards in half in May of 2020.
When viewed through the lens of blockchain.com’s 12-month graph, the current hash rate appears to be in a bit of a plateau.
Analysts are still very divided on whether or not Bitcoin’s upcoming halving has been priced into the cryptocurrency’s market value.
Dovey Wan, a founding partner of San Francisco-based Primitive Ventures, a crypto asset investment holding company, says miners could react badly if the price doesn’t double during the upcoming halving.
Bitcoin mining difficulty, a measure that shows how long it takes for miners to add new blocks of transactions to the blockchain, was down throughout November. Mining difficulty adjusts itself based on the length of time it has taken miners to find the previous 2,016 blocks. If it took less than two weeks, difficulty is increased, and if it took more, difficulty is reduced.
On November 7th, Bitcoin’s mining difficulty decreased by 7%, the first significant reduction in difficulty in 2019, according to stats from btc.com. Since then, it increased by 2% on November 21st and then lost about 0.75% on December 5th.