Bitcoin Miners Return To Profitability As BTC Continues Market Recovery – Bitfinex

Bitcoin miners are back in the green after BTC’s massive recovery over the past week. On-chain data suggests that BTC sales by miners to upgrade machinery and maintain operations are winding down.

The Miner Sustainability metric, an indicator that assesses the profitability of mining activities after accounting for the cost of hardware and operations, shows that this cohort of market participants is now well paid. This marks the return of miners to profitability for the first time in a month.

Miners are turning a profit again

According to the latest Bitfinex Alpha report, miners have been operating at a loss since Bitcoin was halved in mid-April. This led to a period marked as unsustainable for mining operations. With this cohort of market participants completing equipment upgrades, operating costs are expected to be reduced and efficiency improved.

Increasing the mining profit sustainability metric will stabilize the financial position of miners and possibly positively influence the crypto market by reducing the need to sell BTC stakes to cover operating costs.

Bitcoin miners have contributed significantly to the selling pressure since April. Historically, this cohort of market participants has been a significant source of selling pressure following each Bitcoin halving in an attempt to maintain profitability after block rewards are reduced. However, their impact and influence on the market decreased after each halving due to the constant decrease in block rewards, which reduced the number of BTC they could sell.

“Despite a brief rebound in June, the Mining Position Index has now returned to its break-even point. This shift marks a notable shift in market dynamics, indicating that other forces are now playing a larger role in BTC price determination,” Bitfinex analysts said.

A change in sales dynamics

One of the main forces now driving the downward pressure on the price of BTC is the exits of Bitcoin Exchange Traded Funds (ETFs) at the time of the US.

After BTC hit an all-time high in March, ETF outflows dominated the market and overshadowed the selling pressure from miners. This has changed the dynamics of the sell-off, with BTC institutional and government moves now playing a bigger role.

Regardless, BTC has recovered since July 13, hitting a 38-day high of $68,560 after a 28% rally from its local fund. Analysts said the uptrend indicates strong bullish sentiment in the market, setting the stage for further rallies in the coming months.

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