Bitcoin Miners Selling Aggressively As Crypto Market Continues To Struggle

by · November 22, 2022

Haru Invest

Bitcoin (BTC) miners are facing increasing selling pressure as the flagship digital asset continues to struggle below the $16,000 mark.

Capriole Fund founder Charles Edwards said on November 21 that miners were selling at their most aggressive price in nearly seven years, with a 400% increase in selling pressure in the past three weeks. He added that more Bitcoin miners may go out of business if the digital asset’s value does not rise soon.

Miners face a precarious situation

The current state of the market presents a difficult position for miners amid rising energy costs, high mining hash rate and declining BTC value.

According to Coinwarz data, Bitcoin’s mining hash rate currently stands at 243.64 EH/s, which is a steep drop from the all-time high of 347.16 EH/s. Despite the drop, it is still relatively high and poses a problem for miners because it affects mining difficulty of 36,762,198,818,467.

Analysts have predicted that the next mining difficulty may be extremely negative as blocks are not found or are found late due to the high mining difficulty.

Meanwhile, energy costs are rising globally as miners now have to pay more to operate their equipment. Reports showed that energy costs across Europe almost doubled compared to a year ago.

Glassnode tweeted on 18 November that miner Hash Price plunged to a new low of $58,300 per Exahash daily, confirming the extent of the pressure on the industry.

Mining and Hodl strategy haunts miners

More BTC miners prefer to mine and keep the digital asset, hoping that its value will continue to rise. However, with Bitcoin trading in a new bear market below $16,000, it is becoming more difficult for miners to achieve profitability as the asset’s value falls.

Edwards said miners have discovered that:

“Mine-and-hold is not a viable strategy as a Bitcoin miner. Miners are paying the consequences of the ‘never-sell’ arrogance that was prevalent just six months ago.”

Glassnode data shows that the total balance of all crypto miners has fallen to a ten-month low this week. Miners now hold about $30.4 billion, roughly 10% of all Bitcoin.

Meanwhile, IntoTheBlock’s data shows that over 50% of Bitcoin holders lose money on their position for the first time in the last two years.

Some miners are already up and running

Some miners have already started to feel the pinch and are already capitulating.

Bitcoin miner Iris Energy defaulted on a $108 million debt and will shut down operations at two of its facilities. The network felt the impact of the action when Bitsbetrippin tweeted that a major operator shut down its services, resulting in a 15-25% drop in total bitcoin hashrate.

Famous Coinage host Zack Guzman also tweeted that an unnamed Bitcoin miner defaulted on rent in Dallas and left all his equipment behind.

Posted in: Bitcoin, Mining

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