Recent Bitcoin Miner Troubles Could Be Bullish for BTC Price
Bitcoin’s hashrate dropped 4% in the month leading up to December 15, 2024. VanEck analysts view this decline as a historically bullish contrarian signal, suggesting that periods of hashrate compression often precede significant price gains for Bitcoin. Data since 2014 shows that when hashrate falls over 30 days, 90-day forward returns have been positive 65% of the time, and 180-day returns are positive 77% of the time, with an average gain of 72%. This trend may improve profitability for miners and encourage previously unprofitable operations to resume. Currently, Bitcoin trades at $88,400, about 30% below its October all-time high. Miner conditions have worsened, with the breakeven electricity price for a popular mining rig falling 36% since December, signaling tougher profitability. The recent 4% hashrate drop was likely caused by the shutdown of 1.3 gigawatts of Chinese mining capacity, some of which may shift to AI power demands. Despite shifts in mining, around 13 countries—including Russia, France, and Japan—are actively supporting Bitcoin mining activities.
