Bitcoin Mining Weekly Analysis - Feb 16 2024
In the ever-evolving realm of Bitcoin, mining remains a bellwether (leading indicator of trends) worth watching. Let’s unpack this week's mining data and unearth the insights that matter to investors.
💼 Executive Summary:
In the realm of Bitcoin mining, this week marks a period of stabilization and recovery from previous bearish trends. The mining difficulty has seen a marked increase, suggesting a rise in the hash rate as more miners ramp up operations. There's a glimmer of positive momentum with a slight week-over-week uptick in 30-day revenue, hinting at stabilization within the month-long review period. However, the sector faces a significant drop in fees, with a $21.5 million decrease from the previous week and a stark 65% fall over the past month. Network efficiency appears to be improving, evidenced by the shrinking mempool, now at 212 MB compared to 551 MB a month ago, and high-priority transaction fees remaining below $2. The daily number of inscriptions is finding a new equilibrium, with figures consistently between 30,000 and 40,000.
Turning to public mining companies, Cleanspark (CLSK) has emerged as a strong player, surpassing RIOT in market capitalization to become the second-largest public miner. The broader landscape for public miners is looking up, with most reporting positive returns over the last 30 days. Mawson (MIGI) stands as an exception, with a quarterly decline in Bitcoin production, dropping from an average of 68 BTC per month in Q3 to 48 BTC per month in Q4. Despite this downturn in production, Mawson's monthly revenue has increased, bolstered by strategic co-location services and hosting for other miners.
📈 Chart of the Week:
🎯 The Bitcoin Miner ETF (WGMI) has bounced on the 50 DMA and is trying to break above the golden pocket retracement fib formed after its launch in February 2022.
Mining Metrics: 📊
The following is a screenshot of the Bitcoin Magazine Pro Mining Dashboard. Click the image below ⤵️ to zoom in. 🔍
Key Takeaways from the ⛏️ Mining Dashboard:
1. Hash Rate and Difficulty on the Rise:
Hash Rate 7DMA EH/s: ↑ 11.36%
Difficulty: ↑ 11.65%
🕵️ Why It Matters: A stronger, more competitive network is emerging, albeit at the cost of higher operational expenses for miners.
⚠️ Potential Market Impact: A more secure Bitcoin network is a boon for investor confidence, but increased difficulty might tighten miners' profit margins.
2. Bitcoin's Price Stability vs. Revenue Declines:
Bitcoin Price Close: $51,933
Revenue BTC 30-Day: ↓ 6.90%
Revenue USD 30-Day: ↓ 6.42%
🕵️ Why It Matters: Miners may be holding their coins, hinting at a bullish outlook for Bitcoin's price.
⚠️ Potential Market Impact: If miners withhold supply, this could play a role in driving Bitcoin prices up, provided demand stays constant.
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