Bitcoin miners get 27% less BTC after 3 months of major sales
According to a new prediction from crypto analysis firm Arcane Research, miners will continue to sell more BTC than they earn.
Miners sold nearly 30% of record BTC holdings since May
The trip to $25,000 this month eased pressure on a Bitcoin mining sector that has struggled through 2022.
At one point, fears abounded that the miners’ cost of production was far higher than the spot price of Bitcoin, and that large sales would force miners to continue working. Even worse, many may have to retire altogether because their activities are no longer financially viable.
Data from the period since May seemed to confirm that major upheavals were underway. As Arcane notes, one public miner alone – Core Scientific – sold around 12,000 BTC in the period from May to July.
While the trend showed signs of reversing last month, it will take even higher BTC prices to allow even the largest miners to hobble again.
“Although the public miners sold less than half the amount in July as in June, we still see them depleting their holdings if we look at the percentage of bitcoin production sold,” explained Arcane analyst Jaran Mellerud.
“The public miners sold 158% of their bitcoin production in July, making it the third month in a row where they sold more than 100% of their production.”
For context, in April 2022, miners’ hodled coins were at an all-time high, thanks to years of saving at least 60% of BTC received via block subsidies each month.
After subsequent sales, however, their balances trend toward 30% lower, and will only go higher until monthly spending balance is restored.
“I expect selling pressure to continue at between 100% and 150% of production unless something significant happens to the bitcoin price. This equates to between 4,000 and 6,000 BTC per month,” Mellerud added.
Bitcoin (BTC) may have rallied 36% from its June lows, but for miners the pain will continue.
Light at the end of the tunnel
As Cointelegraph reported, a much-needed return to better days for miners may be closer than it seems.
Related: BTC mining shares double in a month as production ramps
Revenue surged nearly 70% in August, while Proof-of-Work mining in general is rising in prominence outside the cryptosphere.
Environmental concerns are no longer holding back big money, something the world’s largest asset manager, BlackRock, praised the sector this month.
Ever-increasing Bitcoin fundamentals, meanwhile, provide real-time evidence that the situation is stabilizing for the backbone of the Bitcoin network. Data from BTC.com estimates that the difficulty is set to increase by around 0.7% this week.
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