Miners are surrendering in droves… Does this threaten Bitcoin?

It appears that the least efficient miners are in danger and will have to suspend their services. They will then be forced to sell their assets to remain on the black market. But does this threaten the future of Bitcoin mining?

The least efficient miners are in trouble

May was a particularly complex month for miners. The falling green line on the 30-day hash rate chart shows that this month has been a real turning point for the mining industry.

In May, the least efficient miners found themselves in trouble. Income is no longer covered Mining costs (Rental, accommodation, electricity, etc.). In fact, the S21, one of the most efficient machines on the market with near 100% efficiency, earned around $80 in May in Paraguay.

The Paraguayan government recently declared its intention to continue selling electricity to miners. Which could encourage machines to migrate to this new refuge for miners.

However, the most popular machines, the S19 machines, find themselves in difficulty, moving ever closer to red and losing ground. The data also revealed that the breakeven price zone for the S19XP miner is $50,000 per bitcoin.

👈Read more: Due to energy costs, a number of countries are cracking down on Bitcoin mining.

However, as Blockware Solutions noted at the time, these numbers are subject to change based on costs and difficulties. With a decrease Activity on Bitcoin, the least efficient S19 machines are therefore in the red. According to analysts, this sale encourages miners to resell their assets:

“Bitcoin is experiencing a rare capitulation from miners. This comes from the halving event, which wipes out weak miners, they abandon Bitcoin, and then the price rebounds.”

Bitcoin miners change strategy

It's also worth noting that in March of this year, more than 600,000 S19 machines began migrating from Texas to cheaper regions like Ethiopia and Paraguay.

As much as the S21 machine found itself in a region suitable for colonization, namely Paraguay, this is already worrying the least efficient miners. Mining companies must therefore adapt. The company's strategy is therefore evolving, moving from collection to partial resale. Daniel Patten said on this subject:

“MARA, for example, is commonly used HODLBut last month, it sold 63% of the Bitcoin mined for the month.

Bitcoin mining companies are expected to start reselling on a large scale this summer, starting in June. This may partly explain the high volatility and decline of Bitcoin over the coming weeks and months.