Bitcoin Miners Face Profit Slump; Nigeria's Central Bank Denies Freezing Crypto Accounts; Mt. Gox Repayment Could Disrupt Market
Summary:
Following the Bitcoin halving, miners are experiencing lower profits due to high network hash rates, as reported by CryptoQuant. Meanwhile, the Central Bank of Nigeria denied rumors of freezing crypto accounts. In Japan, Mt. Gox creditors are set to recover over $9 billion, a move which could potentially disturb the market. Despite the challenges, market conditions remain stable according to analysts.
Following an impressive profit surge on halving day, Bitcoin miners are now grappling with a significant dip in profits. Meanwhile, Nigeria’s central bank is rumored to have ordered the banks and financial institutions to provide user information of a few crypto exchanges and block their transactions — claims the bank later refuted. Over in Japan, Mt. Gox creditors are set to recuperate over $9 billion, a move that, according to K33, could rattle the market.
Bitcoin miners are now feeling the pinch after a momentary profit high after the so-called four-year halving event. Per a report by CryptoQuant, the crypto analytics company, the hash price has taken a dive from about 12 cents in early April to a mere 7 cents following the halving. Here, hash price signifies the income from mining calculated per tera-hash basis.
Even though revenues are dwindling, CryptoQuant assures that the market condition still appears steady, stating, “Despite the halving’s potential long-term ramifications on the network hashrate, miners seem to be operating at a pace similar to that before this event.”
The Central Bank of Nigeria (CBN) had to clarify and quash a report that it had directed all financial institutions to identify the accounts dealing with crypto exchanges and place them on a 'Post No Debit' (PND) restriction for six months. Essentially, a PND order implies that the account holder will be barred from making any debit transactions, meaning, no withdrawals or payments can be made from that account. The CBN categorically denied these rumors only to retract the denial statement and hours later, restating that the allegations were indeed false.
Back in December 2023, the apex bank had revoked its blanket ban on banks conducting transactions with cryptocurrencies, allowing them to cater to crypto exchange transactions. But soon after, the Nigerian government shifted its focus to crypto trading platforms when the naira lost its value rapidly and inflation soared to 29.9%. Consequently, websites linked to crypto trading that had earned a reputation for establishing informal naira valuations were blocked off.
On another front, around $9 billion worth of Bitcoin from Mt. Gox could soon be in the hands of its holders within the next few weeks. This return is likely to unsettle the Bitcoin price and ‘shake up the market,’ as per analysts at K33 Research. Creditors of Mt. Gox have been waiting for over a decade to get back their money after the exchange shuttered its doors in February 2014. Recent updates on the claims process suggest that Bitcoin reimbursements may start as early as next month.
Around $9.4 billion in Bitcoin and $72 million in Bitcoin Cash (BCH) are due to 127,000 Mt. Gox creditors. K33 analysts warn that the refund of these coins "could turn out to be a significant negative price factor in the coming weeks.” The analysts further pointed out that this massive influx of Bitcoin may not necessarily result in selling pressure, but the “overhang” of 142,000 BTC and 143,000 BCH might still “shake up the market,”
Remember, this article does not offer investment advice or ideas. Investing and trading involve risks, and readers must make their own informed decisions after undertaking thorough research.
Geraint Price, Sam Bourgi and Felix Ng have contributed to this report.
Published At
4/24/2024 9:55:06 PM
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