CryptoQuant CEO: Bitcoin Mining Companies Switching to Alternative Coins due to Increasing Operational Costs
According to the CEO of CryptoQuant, Bitcoin (BTC) miners are taking measures to protect themselves from the recent price decline by mining alternative cryptocurrencies.
Ki Young Ju explains that Bitcoin’s hashprice has reached a record low, leading mining companies to slow down their investments in mining rigs and explore mining other proof-of-work (PoW) coins that are cheaper at the moment.
Hashprice is a metric that indicates the expected value of 1 TH/s of hashing power per day and helps miners understand how much they can potentially earn based on their hashrate.
Ju states, “Bitcoin hashprice hit an all-time low. Many mining companies slowed mining rig investments, with some switching to other PoW coins to hedge against market uncertainty… This doesn’t mean the end of the cycle. And they’re not long-term bearish; they’re just hedging and waiting for buy-side liquidity to recover, in my opinion.”
While Ju acknowledges that this trend reflects miner capitulation, typically seen before a bullish run in Bitcoin, he also mentions that this could be a temporary phase as miners wait for market conditions to improve.
As of now, BTC is trading at $60,681.
Recently, Ju pointed out that Ethereum’s (ETH) Market Value to Realized Value (MVRV) indicator is signaling the start of an altseason.
The MVRV indicator compares a crypto asset’s market capitalization to its realized capitalization to assess whether it is undervalued or overvalued.
“We’re entering early altcoin season. ETH MVRV is rising faster than Bitcoin (BTC) MVRV, suggesting ETH market is heating up relative to its on-chain fundamentals. Given the current ETF situation, this might be an ETH-only season. Historically, when ETH surges, other altcoins tend to follow.”
ETH is currently trading at $3,360.
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