Bitcoin Miners Face Drawdown Similar to FTX Collapse Levels

Bitcoin miners face significant challenges as the network's hashrate drawdown has plunged to levels not seen since FTX's collapse in late 2022. Currently, the hashrate drawdown stands at -7.7%. This indicates that many miners are shutting down their operations due to unprofitability. This drawdown closely mirrors the market bottom observed after the FTX implosion.

As you can see in the above graph, the Bitcoin network's true hashrate drawdown is currently at -7.7%, similar to the market bottom after the FTX collapse, indicating significant miner shutdowns.

Miners have also seen a substantial hit to their daily revenue. It fell to $29 million today from $79 million on March 6. This 63% decline in daily revenues, driven by the halving has forced many miners to close their shop. A collapse in transaction fees to just 3.2% of total revenue has exacerbated the situation, leading to the subsequent drop in hashrate.CryptoQuant reports that miner capitulation levels are now comparable to those in December 2022. This was the market bottom following the demise of FTX.

Miner capitulation refers to a situation where miners unable to sustain operations due to high costs and low Bitcoin prices, shut down their mining rigs. This often leads to a decrease in the overall hashrate of the Bitcoin network. Hashrate is a measure of the total computational power used to mine and process transactions on Bitcoin network. A higher hash rate indicates more competition among miners and greater security for the network as well.

Bitcoin miners face severe revenue drops and shutdowns, leading to a -7.7% hashrate drawdown, reminiscent of the post-FTX market bottom. This highlights the intense pressure on miners amid fluctuating Bitcoin prices and halving impacts.