Public Bitcoin Miners in Better Financial Health Despite 12.1% YoY Decline in BTC Holdings
Glassnode data analyzed by CryptoSlate shows that Bitcoin miners are starting to enjoy some respite this year after struggling in 2022.
Bitcoin miners’ holdings fall 12.1% year-on-year
As of January 2022, Bitcoin miners held 36,003 BTC, with mining companies such as Core Scientific, Riot, Hut8, Marathon, and Bitfarms holding over 30,000 coins.
However, the landscape appears to have changed this year as Hut 8, Marathon and Riot are now the dominant miners, holding 87% – 27,760 BTC – of miners’ BTC holdings, according to CryptoSlate’s research.
Bitfarms and Core Scientific dropped out as they struggled in 2022 – the latter filed for bankruptcy while the former traded on debt obligations.
Meanwhile, the market has seen a small BTC distribution from miners in January 2023 compared to the previous year.
Apart from that, the shares of several miners have risen by triple digits compared to the year to date (YTD). Miners such as Hut8, Riot, Iris, Marathon, etc. have all seen their shares increase by over 100% YTD.
Miners are selling their BTC to exchanges at ‘extremely low levels’
CryptoSlate’s Analysis showed that miners appear to be in a healthier position compared to the previous year.
According to Glassnode’s data, as analyzed by CryptoSlateminers are selling their BTC to exchanges at extremely low levels compared to previous years.
This is because profitability is starting to return to the mining industry as BTC’s price has risen by around 50% in 2023 — the flagship digital asset briefly traded above $25,000 for the first time since August 2022 on February 16.
Meanwhile, Bitcoin hash rate rose 34% year-over-year to hit a new all-time high of 300 TH/s. This shows the current consistency and strength of the network.
Mining BTC is currently cheaper
The difficulty regression model, a metric used to measure the cost of mining Bitcoin, is currently below the asset’s spot price.
According to the chart above, DRM is at $20,000, more than $4,000 below BTC’s current spot price at the time of writing.
The current level of DRM is important for miners to maintain as it ensures that they are in an excellent financial position even if hash rates continue to shoot and mining difficulties increase.
Meanwhile, DRM can also be used to gauge bear market sentiments when BTC’s price falls below DRM.
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