If you have perused Bitcoin and Crypto Twitter at all over the past few weeks, you’ve likely seen the term “miner capitulation” mentioned again and again.
You see, over the past few months, the price of BTC has fallen off a proverbial cliff, tanking from $14,000 to $7,000 in a matter of months. As this has taken place, Bitcoin’s hash rate, the amount of computational power being dedicated to processing blocks, has started to slow, leading some to fear that a “miner capitulation” has taken place, whereas non-industrial mining operations “get backed into a corner.”
This theoretically should force miners to sell the BTC they earned via mining, often all at once, to keep the lights on, cash out, or to upgrade their systems for the future. This may sound relatively innocuous — of course, miners need to sell Bitcoin to fund their operational expenses — but this can be a vicious cycle.
Some have feared, then, that Bitcoin is on the verge of collapsing entirely because of the seeming miner capitulation. Read More...