Cryptocurrency analysis firm Alphractal has identified the first capitulation event among Bitcoin miners in 2024, although the risks to the network remain.
Bitcoin Miners’ Revenue Per Hash Hits Historic Low
Based on metrics like Hash Ribbons, Difficulty Ribbons, and a proprietary capitulation identifier, Alphractal has distinguished between Moderate Capitulation and Aggressive Capitulation. Moderate Capitulation occurs when some miners reduce operations or shut down, while Aggressive Capitulation is a more severe event involving widespread miner closures, often triggered by drastic price drops or exceptional events.
Historically, Aggressive Capitulation has followed periods of high miner revenue during bull markets. This pattern was observed in 2011, 2018, and 2021. Significant changes in the Hash Rate compared to network difficulty can also indicate capitulation, as miners have a limited window of around 14 days to adjust.
In June 2024, a Moderate Capitulation event occurred as miners faced the lowest daily revenue per hash in history. While revenue in USD has followed a consistent growth channel, post-halving recovery has been slower than in previous cycles, reflecting the changing dynamics of mining in 2024, especially with the rise of US mining operations.
The growing influence of large mining companies has directly impacted on-chain metrics. The correlation between the performance of these companies’ stocks and on-chain metrics suggests a more competitive and centralized market.
The centralization of Bitcoin mining is a growing concern. Large corporations have increased computational power, making it difficult for smaller miners to compete.
