Bitcoin miners struggle and seek derivatives for risk management amid declining Bitcoin revenue

Bitcoin has struggled to break resistance to around $85,000, down 30% from its all-time high of $109,287 in January.

As a result, there is growing market uncertainty regarding the current cycle phase.

According to the Anthony Power Report published by Compass Mining, historical patterns associated with Bitcoin Harving events suggest potential benefits for the second half of 2025 or early 2026 despite recent revisions.

Bitcoin's previous cycles have consistently sharply followed by a significant slump, particularly a peak in 2017 and a 75% decline since 2021, followed by an 80% crash.

Currently, on-chain indicators provide mixed signals. The MVRV Z score is the ratio of market to realised value, meaning that Bitcoin may be in deep value or integration zones, but the percentage of Bitcoin for more than a year remains at 63%, indicating investor attention and potential market stabilization.

The Fear & Greed Index further highlights market uncertainty, and recently plunged into “extreme greed” levels in December 2024, after reaching “extreme terror” levels.

Macro factors, including changes in institutional investment and US policy development, have had a major impact. The Bitcoin ETF approval initially increased its price by 126% in January 2024, but early 2025 saw a record-breaking ETF spill, suggesting that institutional support had weakened.

Conversely, President Trump's recent executive order establishing a strategic US Bitcoin Reserve reflects on continued federal adoption.

Despite short-term volatility, Anthony Power's forecasts maintain optimism about Bitcoin's long-term outlook. Standard chartered and Bitwise project prices are at close to $200,000 by the end of the year, driven by new institutional inflows and clarity of regulations.

In the case of Bitcoin Miners, recent price adjustments combined with mining difficulty and reduced block rewards have significantly reduced profitability, highlighting the need for strategic risk management through derivative tools such as Luxor's Hashprice contracts.