Bitcoin [BTC] miners see green: Will there be an easing in selling pressure
- Bitcoin miners are seeing profits due to increased BTC prices and reduced transaction costs.
- Retail interest is high, but the impact of BTC whales could lead to price volatility.
In the latter half of 2022, many Bitcoin [BTC] miners faced the heat as prices of the royal coin continued to decline. The cost of energy and machinery led them to sell BTC to remain profitable. However, as the prices of BTC rose, mining started to become profitable.
Read Bitcoins [BTC] Price prediction 2023-2024
Some relief for BTC miners
According to Glassnode’s data, after BTC crossed the $26.1k threshold, efficient groups of miners earned a 2x premium on their mining rigs. This increase in BTC’s price created a positive environment for miners and many have earned more income.
#Bitcoin prices are now trading above the estimated production cost model for a post-halving environment 🟣 at $26.1k.
This means that the most efficient group of miners produce $BTC with 2x premium for input costs.
h/t @paulewaulpaul for the model
📊 pic.twitter.com/zbQPC3SQ4W
— glassnode (@glassnode) March 21, 2023
One reason for the same has been a decrease in transaction costs for miners, which have dropped from $96 USD to $79 USD. This decrease in transaction costs has positively affected profitability, as miners can now earn more with less expenses.
Source: blockchain.com
Many mining pools have also seen profitability, with pools such as Foundry USA and Antpool taking up a large proportion of the BTC mined. Over the past six months, Foundry and Antpool have mined 7,769 and 5,189 blocks respectively.
Source: Blockchain.com
Another reason why miners have started to see profits is due to increased activity on the network. As exchange transfers are relatively low, it can be deduced that most of this activity is due to peer-to-peer transactions and through the introduction of ordinals and inscriptions.
Addition of these ordinals also attracted a large amount of retail investors to the Bitcoin network.
Source: Glassnode
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While high retail interest may be good for BTC in the long run, a large amount of BTC is still held by whales. These whales hold a significant amount of BTC and can potentially influence market trends.
Therefore, retail investors could be exposed to a sharp price decline if these whales decided to sell at press time.
Source: Sentiment
