Public Bitcoin mining companies are almost out of coins to sell
Public bitcoin mining companies have been caught between a rock and a hard place with the decline in bitcoin prices. As their cash flow had dropped significantly, they had turned to selling BTC to keep up with the cost of operations. The huge stock of BTC that these public miners had accumulated during the incredible year of 2021 is now on its way to the market. But they quickly run out of coins to sell.
Bitcoin Miners dump coins
Over the past three months, there have been reports of Bitcoin miners dumping thousands of BTC. The volume of BTC sold was alarming because it was more than the miners produced in a month.
On September 2, blockchain data aggregation firm CryptoQuant revealed that bitcoin miners had sold around 4,586 BTC in 3 days. At the time, bitcoin’s price was trending just above $20,000, bringing the dollar value of the sale to more than $93 million at the time.
In the month of July, public bitcoin miners had sold a total of 5,700 BTC. The trend would continue into the month of August as miners continued to offload more queries. By the third week of August, they had dumped more than 6000 BTC.
By selling their stash of BTC, public bitcoin miners have been able to stave off bankruptcy. However, their holdings of BTC are not bottomless and they are running out of coins to sell.
The miners’ balance is low
Public bitcoin miners have now sold a healthy portion of their balances at this point. The selling has been understandable given the state of the market, but miners are now facing another problem and that is the fact that they are running out of BTC to sell.
Since they have sold more BTC than they have produced, their balances have taken a hit. The companies that have suffered the most have been Marathon Digital and Hut 8. At the end of March 31, before they started selling BTC, both of these miners had huge balances. Over the past three months, Marathon Digital has sold over 60% of its BTC holdings, along with Stronghold. Hut 8 has sold around 40% of its holdings, while Core Scientific has sold around 33%.
Miners running out of BTC to sell | Source: Arcane Research
However, not all miners have followed this trend. In fact, some miners have used this time to increase their holdings. Riot Blockchain is an example of a public bitcoin miner that has increased its stake in the last 3 months by almost 100%. Cleanspark also recorded a 15% increase in its BTC balances.
Despite these miners having to sell large amounts of BTC, the majority continue to do well financially. The only one on the list to see deep financial struggles is Stronghold, and this has to do with the company not having much in the way of a large BTC balance to begin with.
Featured image from Vecteezy, charts from Arcane Research and TradingView.com
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