There is some bullish news from the mining industry before Bitcoin (BTC) halves. Miners hoard BTC, expect higher prices and buy thousands of installations, while the recent rally has made older installations profitable again, drawing many miners away from the exit door.
The miners have sold less than they mined and hoard BTC 1,067 ($ 10.5 million) last week, according to crypto asset data provider ByteTree. This usually indicates a soft market offer and is therefore considered bearish. However, the company says, given the recent price hike, “this has clearly not been the case, so we can only assume that the miners also think higher prices will come after halving.”
The price hike was not the only positive development for the miners, as weekly network costs exceeded $ 4 million and mining issues rose less than 1% this week.
As conditions improved, even older mining machines like BitmainThe Antminer S9 are back in the game. The Antminer S9 peaked in April 2018 with 80% network hash rate or the network computing power attributed to it, but it was now believed to be leaving space, with many of them reportedly lying unused, as well as the S9’s share series in the hash rate drops to c. 23%, according to crypto mining publication Miner update.
Profitability Bitcoin Mining USD / day for 1 THash / s, 7-day simple moving average
Meanwhile, since the mining reward halving is only a few days away, miners are also investing in more efficient machines.
After the recent purchase of 1,000 S19 Pro (110 TH) miners, Riot Blockchain, a Nasdaqpublicly listed crypto mining company, has announced that they have bought another 1,040 new generation Bitmain S19 (95 TH) Antminers for $ 1.9 million. They expect to receive and deploy the 2,040 new S19 miners in the third quarter of 2020. Their total operational hash rate is estimated to increase by more than 80% to about 457 PH / s.
At the same time, crypto mining company Argo also recently installed 1,000 Bitmain Antminer S17 + machines, bringing the total mining capacity to c. 18,000 machines and 730 Petahash, which is a 244% increase in hash power from the end of 2019. Argo saw a monthly production decline in April due to difficult mining conditions, but the company declined 319.2 bitcoin or bitcoin equivalent in April, resulting in the total amount of BTC mined 1,237 in the first four months of 2020 – a record level for the group and an increase of 122% in the past four months.
While the miners’ capital reserves were wiped out in the March crash and the mining reward halving could spell the end for many miners, halving-related investor optimism has pushed BTC above the psychologically relevant level of $ 10,000, up 150% from from the low of 2020, said Henry Elder, director of investment strategies at financial services companies Wave Financial Group. This is likely a “buy the hype, sell the news” situation, as halving is usually followed by a price correction for a bull run, he added.
The likelihood of a correction is “reinforced by the general sense of uncertainty that is currently pervading all markets,” but the longer-term bull case “is also reinforced by current market dynamics, as outlined by revered investor Paul Tudor Jones this week when” announcing his intention to add the asset to his flagship fund, ”Elder emphasized.
Meanwhile, if the correction happens after the halving, the second half of May would be even more challenging for Bitcoin miners, especially less efficient ones. Since the Bitcoin hashrate has risen nearly 30% since late March and is now reaching a record high, which was reached in early March, mining issues are now estimated to be 2.35%, reaching almost a record high in nine days. After the halving, however, it has been estimated that hashrate is declining, which, if the drop is significant enough, would make Bitcoin mining less difficult within about 6 days of halving. (Learn more: These Miners Might Suffer Most After Bitcoin Halving)
Bitcoin is expected to be halved on May 11-12. BTC is currently trading (13:21 UTC) for $ 9,836, up 4% in a day and 10% in a week. The price increases by 35% in a month and 62% in a year.