New miner capitulation?Miners are notorious beneficiaries of market strength while being similarly exposed to distressing conditions during market weakness. Miner capitulations are the name of the game in BTC cycles. Earlier this fall, we argued that a miner capitulation ala 2018 is highly unlikely. We reassess and clarify our view in light of recent events.
The hashrate has declined substantially in the last week, and miners are selling more aggressively. The declining BTC prices is likely to cause pain for indebted miners. Nonetheless, we believe that a miner capitulation will have a negligible impact on BTC prices, in contrast to what we saw in 2018. The substantial selling in May and June occurred on top of more sizeable selling from Celsius, 3AC, and their counterparties. The miner selling in May and June also reduced the impact of new rounds of miner selling pressure today. Still, bitcoin miners will likely experience a very challenging period ahead.