CryptoQuant CEO Ki Yong Joo stated that Bitcoin (BTC) miners are responding to recent price declines by diversifying their mining activities into other cryptocurrencies.
He noted that the hash price of Bitcoin has hit an all-time low, potentially reducing mining investments and prompting miners to explore other more profitable coins as a temporary measure.
“Bitcoin hash price hit an all-time low. Many mining companies slowed mining rig investments, with some switching to other PoW coins to hedge against market uncertainty.” https://t.co/fwTGWRzcz6 pic.twitter.com/j7qbAvXvXq – Ki Young Ju (@ki_young_ju) June 28, 2024
The hash price measures expected revenues per terahash per second (TH/s) of daily hashing power, providing miners with an estimate of potential profitability.
Joo explained that many mining companies have reduced their investments, opting instead to mine other PoW coins to mitigate market risks. He emphasized that this strategy does not reflect a long-term bearish outlook but rather serves as a temporary hedge until purchasing liquidity improves.
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Joo also acknowledged that this shift may signify miner capitulation, often a precursor to Bitcoin’s bullish cycles. At the time of writing, Bitcoin is trading at $62,100.
Additionally, Joo highlighted the positive trend for Ethereum (ETH), citing its Market Value to Realized Value (MVRV) ratio. The MVRV ratio compares Ethereum’s market capitalization to its realized capitalization (the value of all ETH based on their purchase price), indicating whether Ethereum is undervalued or overvalued.
“We’re entering early alt season. $ETH MVRV is rising faster than BTC MVRV, suggesting ETH market is heating up relative to its on-chain fundamentals. Given the current ETF situation, this might be an ETH-only season. Historically, when ETH surges, other alts tend to follow.” pic.twitter.com/YHq5YzkBlD – Ki Young Ju (@ki_young_ju) June 19, 2024
According to Joo, the increasing MVRV of ETH signals the beginning of altcoin season. He noted that ETH’s MVRV is rising faster than Bitcoin’s, potentially leading to an altcoin season focused on Ethereum, historically followed by rises in other altcoins.
