After showing signs that it was going to break through the $10,000 barrier some months ago, Bitcoin has been trading a little below the $9,500 price mark since June 25. With the sideways movement experienced by the digital asset, selling pressure was the major factor that pushed the price of the crypto down to the $9,000 region.
With the coin not showing convincing movement and, as a result of the high fees miners are paying on the bitcoin network, most of them have abandoned their rig. According to data analysis, the revenue generated by miners went as low as 23% in June compared to that of May with miners generating $366 million in May to the $281 million generated in June.
Miners bitterly complain about low profit returns
With the way miners are striving hard to generate revenue for the economy from the bitcoin network, their focus was on acquiring updated mining equipment. As a result of Bitcoin miners purchasing new and update mining equipments, it has given a massive boost to the industrialization of Bitcoin mining. According to data presented by Coingecko, miners recorded a 74% increase in their mining efficiency as they updated their miners between the second and third halving. Miners were said to have followed the trend and updated their miners from CPU to GOU and then to FPU and finally to ASIC miners.
As a result of not being able to keep up, miners with outdated mining equipment were forced to leave the network after the third halving due to the halving in the rewards gotten from a block. Miners with updated equipment are currently going through tough times as they have been finding it challenging to break even due to Bitcoin’s performance in previous weeks. To salvage their losses, most of the miners left Bitcoin and switched to its hardfork like Bitcoin Cash and Bitcoin SV.
Majority of miners are now turning to Bitcoin hard forks
Earlier this year, Binance noted that they experienced a surge in the amount of Bitcoin SV miners after they launched its mining pool around April. The platform also became one of the most sought after platforms after it announced a “smart pool,” a feature that allows miners to maximize their profit as the incentivized Bitcoin, Bitcoin Cash, and Bitcoin SV miners. With some miners leaving Bitcoin and moving to its hard forks, others thought movement from their present location to another was ideal for getting enough returns. With China actively pro blockchain due to their low electricity cost for mining, the majority of bitcoin miners moved to Sichuan, a city in the country.
Sichuan has been responsible for mining about 54% of the total Bitcoin presently in supply since December 2019. Asides movement to favorable locations, another way to woo miners back to the network was an adjustment in difficulty. The difficulty level dropped well to 9% and brought a huge relief to miners with some of the old miners returning to the network. Considering Glassnodes data, the firm mentioned that blocks were produced at a high rate due to miners returning to the network. Around January 2018 when BTC saw its difficulty move to well over 14%, the price experienced stagnation which caused most of the miners to leave the network