CryptoQuant: BTC Miner Capitulation May Signal Bottom

  • Marathon Digital Holdings holds 18,536 BTC valued over US$1.1 billion, opting not to sell in June despite plans for future sales to manage operations.
  • The recent Bitcoin halving has reduced miner profitability, pushing less efficient miners towards capitulation while Marathon aims to expand and enhance efficiency.
  • Despite market pressures and a significant hash rate drop, historical patterns suggest potential for a Bitcoin price rally.

Marathon Digital Holdings, the largest Bitcoin mining firm, retained all its Bitcoin holdings despite a month-long downturn, holding 18,536 BTC valued over US$1.1 billion (AU$1.6 billion). The company said it plans to boost its Bitcoin yield through market purchases and other investment opportunities.

Related: Bitwise Amends Spot Ethereum ETF Application Amid Trading Rumours for Next Week

MARA opted not to sell any bitcoin in June. The Company still intends to sell a portion of its bitcoin holdings in future periods to support monthly operations, manage its treasury, and for general corporate purposes.

Marathon Digital Holdings

The recent Bitcoin halving event reduced the block reward for miners, which is expected to decrease their profitability, especially for those with higher operational costs.

Marathon’s statement indicates it might be better positioned to weather the reduced profitability due to enhanced efficiency, technological superiority, and a strategic focus on scaling up operations, which supports their decision to hold rather than sell their bitcoin assets.


Miners in Distress: CryptoQuant

As CryptoQuant notes, not everyone is in such a strong position. Many miners have been “extremely underpaid” since the halving, leading to a decrease in total daily revenues from US$79 million (AU$117.6 million) to US$29 million (AU$43.2 million).

Bitcoin daily miner revenue, source: CryptoQuant via The Block

This situation typically forces less efficient miners to either sell their Bitcoin holdings to cover operating costs or shut down their operations entirely.

Historically speaking, this situation – called miner capitulation – is often a precursor to a renewed rally to fresh highs.

CryptoQuant also stated that Bitcoin’s hash rate has decreased by 7.7% from a record-high 623 EH/s to 576 EH/s, marking its lowest in four months, similar to a previous drop before a significant price surge.

Historically, an extreme hash rate drawdown has been associated with price bottoming conditions.


BTC Price Struggles to Keep Above $60K

Meanwhile, the price of Bitcoin has recently fallen several times below the important psychological barrier of US$60K (AU$89.3K). Mt. Gox repayments, the moving of large amounts of BTC by the governments of the US and Germany, and US interest rate discussions have been affecting the price performance.

Related: Read What Pav Hundal, Swyftx Lead Market Analyst, Thinks About Where BTC is Headed

BTC closed the month of June in the red and has dropped almost 7% in June, and a further 4% this month already.

Bitcoin (BTC), monthly graph, source: CoinMarketCap

Aaron Feuerstein

Aaron Feuerstein

Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.

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