Bitcoin’s hash rate is approaching another record high above 230 exaheesh. According to Blockchain.com, this figure has increased significantly since the beginning of June 2022, and last week the BTC network’s difficulty level increased.
However, the 30,283t difficulty level and declining prices are preventing miners from maintaining high revenues.
We are seeing a significant decrease in miners’ earnings despite the increase in complexity. This suggests that miners’ operations have expanded, capital has been spent, and production costs have increased as revenues have fallen.
As earnings multiples decline across the board and financial stress increases, the likelihood is high that the market is in the second and historically last phase of a bitcoin bear market capitulation, Glassnode noted in its weekly report.
Bitcoin miners aren’t the only crypto market participants taking losses. According to Glassnode, most BTC holders who have bought the cryptocurrency in the past 18 months are now seeing unrealized losses. The short-term supply of BTC in losses currently ranges between 16% and 18%.
Nearly 58% of the circulating supply is currently in profit, while that figure has fallen to <50% over the past three market capitulations.
Short-term holders are also at a loss, with a profit percentage of only 2.2%. The percentage of long-term holders has fallen from 68.5% in April to the current 55.7%, indicating that they are now bearing most of the market’s unrealized losses,” Glassnode explained.