Bitcoin miners are starting to shift to other cryptocurrencies

Bitcoin (BTC) miners are responding to the recent price drop by diversifying their mining activities into other cryptocurrencies, according to CryptoQuant CEO Ki Yong Joo.

He notes that the hash price of Bitcoin has hit an all-time low, potentially reducing investment in mining and prompting miners to explore other, more profitable coins as a stopgap 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 the expected revenue for each terahash per second (TH/s) of daily hashing power, giving miners an idea of ​​their potential returns.

Zhu explains that many mining companies have scaled back their investments, opting instead to mine other PoW coins to reduce market risks. He emphasizes that this strategy is not indicative of a long-term bearish outlook, but rather a temporary hedge until buy-side liquidity improves.

Zhu also acknowledges that this change could mean capitulation among miners, a common precursor to Bitcoin's bull run. At the time of writing, Bitcoin is trading at $62,100.

In addition, Zhu pointed out the positive trend for Ethereum (ETH) , indicating its market-to-realized value (MVRV) ratio. The MVRV indicator, which compares Ethereum's market capitalization to its realized capitalization (the value of all ETH based on its purchase price), clarifies 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 Zhu, the rising MVRV of ETH indicates the beginning of the altcoin season. He notes that Ethereum's MVRV is increasing faster than Bitcoin's, which he believes could lead to an Ethereum-focused altcoin season, historically followed by a rise in other altcoins.