CoinNess reports:
The Bitcoin hash rate has dropped significantly in the past few days, which may lead to miners surrendering. Activity on the Bitcoin network has also dropped significantly. A key indicator of Bitcoin network processing power, the hash rate has dropped to its lowest point since December 2022. According to Blockchain.com, the hash rate of Bitcoin has dropped drastically this month, plummeting to the turbulent period when the FTX exchange crashed in late 2022.
However, there is a crucial difference between these two situations. The current decline in hash rate has occurred after Bitcoin’s recent halving, reducing miner rewards to 3.125 bitcoins per block mined. The decrease in hash rate suggests that some miners may be struggling to make ends meet. When miners are forced to shut down operations due to unsustainable costs, Bitcoin miners will surrender. This typically happens when the cost of mining Bitcoin, including electricity, hardware, and maintenance fees, exceeds the income generated from mining rewards.
The recent halving undoubtedly exacerbates this challenge for miners, as they are now earning less Bitcoin for the same amount of work. The current drop in hash rate may indicate that some miners are surrendering and leaving the network. If costs continue to rise, miners are forced to sell their holdings, BTC may face downward pressure, potentially leading to a significant adjustment.
Bitcoin ecosystem in distress:
With the decrease in network activity, miners are also struggling to address the issue of reduced income from alternative sources. Initially, during the frenzy period of the Rune protocol based on Bitcoin after the halving, they benefited from high fees. However, with the slowdown in network activity, earnings have sharply declined. Daily Rune trading volume plummeted, dropping by a substantial 90%. Consequently, total revenue from Rune trading for miners also significantly decreased.
Meanwhile, overall NFT transactions on the network have also dropped significantly in the past few days. Data from CryptoSlam shows that sales of these NFTs last month have decreased by 68.32%. Additionally, activity on the network has also decreased.
Reading Bitcoin price predictions 2024-25, AMBCrypto’s analysis of Santiment data indicates that over the past 30 days, the daily active addresses on the network have significantly decreased from 955,000 per day to 666,000 per day. This decline in activity may further impact miners’ ability to generate significant income.