The Kaspa price pumped 8% today and broke past $0.080 during a broader crypto market recovery that was fueled mainly by big news dropped by Ripple’s CEO that SEC finally dropped the XRP lawsuit.
However, the Kaspa community could be positive because of a viral thread posted on X by ‘Kaspa Report’ analyst who has been following KAS in detail in recent weeks.
What you'll learn 👉
Miner Capitulation Phase Explained
Fees paid to Kaspa miners have fallen to the lowest level in six months, pushing the network deeper into the miner capitulation phase. Miners are currently facing a triple challenge: the price has dropped over 60% from its all-time high, daily fees have plunged over 99.9% since their peak, and block rewards have fallen by roughly 33% since mid-2024. This combination of factors has left many miners frustrated and unprofitable.
The network is experiencing widespread miner capitulation as a result. Kaspa’s hashrate has declined about 25% since reaching its all-time high of 1.59 EH/s several months ago and will likely decline further as mining remains largely unprofitable for most miners at the current price.
The network's hashrate has declined about 25% since reaching its all-time high of 1.59 EH/s several months ago and is likely to decline further as mining remains largely unprofitable for most miners at the current price. pic.twitter.com/OmiOQMoYxq
— Kaspa Report (@KaspaReport) March 19, 2025
Despite this seemingly negative trend, there’s a silver lining: widespread miner capitulation is generally considered a reliable market bottom signal in cryptocurrency markets.
Read also: Kaspa (KAS) vs. Binance Coin (BNB): Which Crypto Is Better to Hold?
How Miner Capitulation Affects Supply and Demand
When emissions decline and fees decrease, miners’ income drops significantly, causing many to stop operations. While this might appear to threaten network security, it simultaneously reduces the supply of Kaspa that miners sell, increasing marketplace scarcity.
During the KRC-20 minting and trading frenzy in October 2024, miners earned 24,500,000 KAS in fees, flooding the market with supply. Now, they’re receiving just 5,660 KAS in fees daily, representing over a 99.9% decline from the peak. Additionally, in mid-2024, miners were receiving about 8.6 million KAS in coinbase rewards per day, whereas today they’re receiving less than 5.5 million KAS daily, a decline of more than one-third.
This significant reduction means miners are bringing much less KAS to the market, constraining supply. While miners don’t actually sell all their KAS in practice, this reduction highlights the tremendous impact that declining fees and emissions can have on sell-side flows.
The more constrained marketplace supply becomes, the higher the likelihood of a supply shock and corresponding short squeeze, especially since Wallet #2 is accumulating KAS nearly as quickly as new supply enters the market.
Miner capitulation can ironically boost demand as well. Miners who mine KAS for long-term accumulation may stop mining to buy it on the open market for less than the mining cost, converting themselves from suppliers to buyers. Additionally, miners who don’t capitulate gain pricing power as fewer miners supply the market.
With declining supply and potentially increasing demand, prices usually begin to rise, which is why miner capitulation often signals a cyclical market bottom. It indicates that the positive feedback loops that suppress price are beginning to reverse, and the same feedback mechanisms will soon begin driving price higher.
Miner capitulation can therefore signal a cyclical market bottom. It indicates that the positive feedback loops that suppress price are beginning to reverse, and the same feedback mechanisms will soon begin driving price higher.
— Kaspa Report (@KaspaReport) March 19, 2025
This dynamic reveals that Kaspa functions somewhat like an “energy stablecoin.” When the cost of energy needed to mine KAS exceeds its market price, miners stop operating, reducing the network’s hashrate and energy use. Some former miners then accumulate by buying KAS on the open market, increasing demand and raising its price. Through this rational economic behavior, miners help maintain an equilibrium between Kaspa’s market price and its production costs.
Both operating expenses (including energy costs) and capital expenditures reflect energy costs in mining. Miners who can’t profit will stop mining. This drives down the total hashrate. With fewer miners competing, those who remain have a better chance of earning rewards. Eventually, the cost to mine Kaspa matches what people are willing to pay for it in the market. This natural balance explains why, over time, we often see both hashrate and price moving in similar patterns for cryptocurrencies like Kaspa and Bitcoin that have limited supply.
Although factors like price manipulation can temporarily disrupt this equilibrium, the efficient market will eventually prevail, and Kaspa’s price will tend to revert to its mining cost. Price manipulators effectively receive a subsidy from miners by accumulating Kaspa at artificially low prices, which ultimately causes miners to stop operating until price and hashrate equilibrate again.
While it’s difficult to predict exactly when miner capitulation will end and when the supply shock will hit, both will eventually happen according to market dynamics. When they do, prices typically rise significantly, attracting new miners and restarting the cycle.
Read also: Kaspa Price Struggles Despite Crescendo Upgrades – Here Are Best KAS Alternatives For 2025
Follow us on X (Twitter), CoinMarketCap and Binance Square for more daily crypto updates.
Get all our future calls by joining our FREE Telegram group.
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
