A cycle of miner capitulation can be observed throughout Bitcoin’s history.

When times are good, miners stockpile their Bitcoin, restricting the supply of new coins during high demand and serving as an additional multiplier to the general upward price trend.

When times are bad, like the past few months, miners sell their Bitcoin treasuries—usually to cover operating expenses when mining is less profitable, like when Bitcoin’s price is low, or to pay off over-leveraged positions.

This cycle’s been different, though, CoinShares Bitcoin research lead Christopher Bendiksen told Decrypt.

During capitulation cycles, miners running inefficient or overleveraged operations drop off the network—usually, this has meant that they switch off their machines.

This time, though, except for a brief period due to poor weather in the United States, firms haven’t been shutting off their machines.

This had made the latest capitulation cycle unique, shedding more light on how the mining market is quickly evolving.

(By Tim Hakki)

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