Bitcoin miners are feeling the pressure as BTC price dumps. Still, the expectations of a supply shock could lift prices above resistance – what’s going on with the crypto market?
In the past few weeks, the Bitcoin price structure has been crumbling, slowly inching toward crucial support levels after the drop below $66,000.
Even though experts are confident and expecting a bounce, speculators and holders are not the ones filling the pinch but miners.
Here, it is easy to see why: Bitcoin farms are multi-million dollar installments, powering the network in exchange for rewards disbursed every 10 minutes.
MASSIVE Mt. Gox Distribution Incoming!
Here's the breakdown of the figures:… pic.twitter.com/i7zCdWGbNr
— Kyle Chassé (@kyle_chasse) June 24, 2024
Bitcoin Miners Feeling The Pinch, Revenue Falling
However, over the years since launching, the network has gradually reduced rewards. From 50 BTC in the first epoch, it now stands at just 3.125 BTC per block in the fifth epoch. This number will drop by 50% by 2028.
Between early April and now, miners have had to adjust following a 50% drop in revenue earned from miner rewards, a situation worsened by falling prices.
Moreover, a slowdown in on-chain activity, even after the hopes of the Runes Protocol, presents an even more challenging environment. Experts note that the miner revenue per terahash per second (TH/s) has sunk to record lows. At the same time, the seven-day average of new Bitcoin wallets is at the lowest point in six years.
Even amid this storm, some analysts are upbeat, expecting prices to expand sharply from spot rates despite expectations of a supply spike in June when Mt. Gox trustees begin compensating hack victims. Over $9 billion of BTC could be sold, negatively impacting prices.
(BTCUSDT)
If BTC weathers this storm and the Mt. Gox impact is handled, experts predict a “supply shock,” considering the rising demand for BTC, especially among institutions and the increasing endorsement of crypto.
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Tailwinds From Trump, Spot Bitcoin ETF Demand: Will Supply Shock Push Prices Above $100,000?
Recently, former United States president Donald Trump said he wants the country to spearhead crypto innovation and would back the Bitcoin mining industry.
While bullish, eyes are on institutions and how they allocate capital to spot Bitcoin ETFs. These derivatives have been a resounding success, with billions flowing to these products since launch in January.
If capital continues flowing to spot Bitcoin ETFs as they did in late February, then with daily emissions dropping by 50% from April 20 and exchanges’ reserve falling, there could be a supply shock as institutions scramble to buy the scarce coin for their clients.
The supply shock and the resulting crisis could push BTC to fresh territory, above all-time highs.
If anything, Bernstein Research now predicts BTC will soar above $1 million in the coming years.
Meanwhile, JMP Securities forecasts that spot Bitcoin ETFs could attract $220 billion in capital within three years.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
