Markets
Bitcoin Miners Return to Profitability as BTC Market Continues Recovery: Bitfinex
Bitcoin miners are back in the green after BTC’s massive rally over the past week. On-chain data suggests that miners’ BTC sales to upgrade machines and maintain operations are coming to an end.
The Miner Sustainability Indicator, which measures the profitability of mining operations after factoring in the cost of equipment and operations, shows that this cohort of market participants is now being fairly compensated. This marks the return of miners to profitability for the first time in a month.
Miners are profitable again
According to the latest Bitfinex Alpha reportMiners have been operating at a loss since the Bitcoin halving in mid-April. This has led to a period marked by unsustainable for mining operations. With this cohort of market players having completed their equipment upgrades, operational costs are expected to be reduced and efficiency improved.
Increasing the miners’ profit sustainability indicator will stabilize the financial situation of miners and may positively influence the cryptocurrency market by reducing the need to sell BTC holdings to cover operational costs.
Bitcoin miners have been a significant contributor to selling pressure since April. Historically, this cohort of market participants has been a major source of selling pressure after each Bitcoin halving in an effort to maintain profitability after the block reward reduction. However, their impact and influence on the market decreases after each halving due to the constant decrease in block rewards, which decreased the number of BTC they could sell.
“Despite a brief spike in June, the Miner Position Index has now returned to its equilibrium point. This move marks a notable shift in market dynamics, indicating that other forces are now playing a larger role in determining BTC’s price,” Bitfinex analysts said.
A change in sell-side dynamics
One of the main forces now driving downward pressure on the BTC price is the outflow of Bitcoin spot exchange-traded funds (ETFs) in the United States.
After Bitcoin hit an all-time high in March, ETF outflows dominated the market and eclipsed miner pressure on sellers. This shifted the dynamics on the sell side, with institutional and government moves on Bitcoin now playing a larger role.
Anyway, BTC has been in recovery since July 13, reaching a 38-day high of $68,560 after rising 28% from its low localAnalysts said the uptrend signals strong bullish sentiment in the market, paving the way for further rallies in the coming months.