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Why Bitcoin miners continue to face pressure

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Here’s why the recent decline in the Bitcoin difficulty-adjusted puell multiple may indicate that the pressure on BTC miners is still present.

The puell multiple for Bitcoin, which is adjusted for difficulty, has yet to surpass 1.

A researcher at the on-chain analytics company Glassnode estimates that miners are still making about 12% less than has been the norm during the previous year. The “puell multiple,” which calculates the difference between the daily Bitcoin miner earnings (in USD) and its 365-day moving average (MA), is the relevant indicator in this case.
When this metric’s value exceeds one, it indicates that the miners are now earning more than they did on average during the previous 12 months. In such times, mining is typically beneficial for miners.

Values below this cutoff, on the other hand, indicating that miner incomes are below the annual average and can indicate that this cohort is under pressure.

The puell multiple has a drawback in that it is only based on the price of the coin. The mining difficulty, another crucial element for the miners, is not taken into account by the statistic.

The Bitcoin blockchain has a built-in feature called the mining difficulty that determines how challenging it is for miners right now to create new blocks for the network. This idea occurs because the BTC blockchain seeks to maintain a consistent value for the block production rate (or, to put it another way, the pace at which miners process transactions).

Miners may hash blocks more quickly as the network hashrate increases (a metric of the overall computer power linked to the chain). However, because the chain does not want this to happen, it makes it harder to slow down miners just enough to return to the ideal speed.

Because of the difficulty, profits for individual miners decrease as hashrate increases. This is due to the fact that block rewards are always the same (apart from when they are half during halving events), which means that when more miners join the network, their individual portions of the total reward decrease.

Since it takes mining difficulty into consideration, the “difficulty-adjusted puell multiple” is a modified form of the indicator that more accurately depicts the position of the miners.

Here is a graph showing the evolution of this measure over the past several years:



The continuing price surge for the asset began earlier this year, as can be seen in the graph above, when the Bitcoin puell multiple passed over the one threshold. This indicator’s current value of 1.2 indicates that miners as a whole are now earning significantly more than the annual average.

Despite the recent large price increase, the difficulty-adjusted version of the statistic remains below one and has been throughout the entire bear market.

At 0.88, miners are currently earning 12% less than the annual average, suggesting that they may still be under pressure, but not to the same extent as at the lows of the bear market.


BTC Price

The price of Bitcoin is currently about $30,400, up 9% over the previous week.