Is miner capitulation a bullish signal? VanEck: Bitcoin computing power plummets, bullish market is brewing.

VanEck pointed out that Bitcoin's computing power has declined by 4% in a single month, with miner capitulation emerging. History shows an increased probability of the return of long positions, while institutions are simultaneously accelerating coin hoarding on dips.

The latest report from asset management company VanEck indicates that recent Bitcoin mining activities have significantly cooled down. If we refer to historical experience, this could likely signal the return of long positions in Bitcoin.

In a research report released on Monday, VanEck mentioned that reviewing market patterns since 2014, when Bitcoin's network Computing Power showed a decline, there was a 65% chance of positive investment returns in the following 90 days; conversely, when Computing Power continued to grow, the probability of positive returns was only 54%.

VanEck analysts pointed out that empirical data shows that “the decline in computing power may actually be a bullish signal for long positions,” describing it as a contrarian indicator, often accompanied by “miner capitulation” — that is, when the price of coins drops and costs rise, compressing profit margins, miners with weaker financial structures are forced to shut down and exit the market, or even sell Bitcoin to survive.

Historically, such “purges” often mark the formation of market bottoms, followed by a strong rebound.

VanEck pointed out that the current market situation perfectly aligns with the aforementioned trend. As of December 15, the total network computing power of Bitcoin has declined by approximately 4% within a month, marking the largest monthly drop since April 2024. The report further indicates that the longer the duration of the computing power compression, the more intense the future rebound often is.

As the coin price weakens, the profit margins in the mining industry are being ruthlessly squeezed. VanEck data shows that, for the current mid-tier mainstream miner Antminer S19 XP, the “break-even electricity price” has significantly dropped from $0.12 per kWh at the end of 2024 to approximately $0.077 by mid-December.

Source: Glassnode

The “breakeven electricity price” refers to the highest electricity cost that miners can bear without incurring losses. A rapid decline indicates that mining profits are thinning, and only miners with lower electricity costs and better capital structures can continue to remain in the market.

As mining pressure increases, VanEck points out that long-term institutional buyers are gradually stepping in, especially as “Coin Hoarding” companies have accelerated their buying on dips over the past month.

According to the report statistics, from mid-November to mid-December, cryptocurrency reserve companies purchased approximately 42,000 Bitcoins, with a monthly increase of about 4%, raising the total holding amount to about 1.09 million Bitcoins.

This is also the largest single-month institutional accumulation wave since mid-July to mid-August 2025 (when over 128,000 Bitcoins were added in a single month).

Looking ahead, VanEck believes that cryptocurrency reserve companies will gradually reduce the issuance of common stock (which dilutes equity) and instead raise funds through preferred stock as the primary source of capital for purchasing Bitcoin.

• This article is reprinted with permission from: “Block客”
• Original title: “Is 'Miner Capitulation' a Signal for a Rise? VanEck: Bitcoin Computing Power Drops Sharply, Bullish Market is Building Up”
• Original author: Block Girl MEL