The cryptocurrency market as a whole has been in a downward price swing, with Bitcoin dropping almost daily. Until now, Bitcoin miners have been putting aside a few BTC tokens in anticipation of their sunny days. However, the constant drop in the prices of virtual assets has led to a constant decline in the prices of the most significant crypto-token.
Consequently, miners are selling their holdings to smooth out the rising costs of operations and other activities as Bitcoin makes some recovery moves.
According to reports, there has been an increase in the transfer of BTC tokens from miners to exchanges. The record shows progressive growth since January with the highest value in May at 195,663 BTC. With an average BTC price in May of $32K, the total value of the tokens sold is $6.3B.
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The high cost could not just be a sale of miners. Some of them could transfer their holding for other transactions on the exchanges. In addition, some well-known firms could transfer huge amounts of BTC tokens for sale through exchanges.
Since the price of bitcoin has fallen by about 35% this year, different categories of sellers are entering the market. Some small miners have faced huge problems in liquidation.
Riot Blockchain Inc. is part of the sellers. Miners trading publicly participated in the accumulation of BTC through price bids to increase the value of the tokens. In addition, equity investors have used the firm as a fiduciary to gain access to cryptocurrencies, reducing absolute asset ownership.
Reasons for the increase in sales of bitcoins by miners
With the trend of bear market events, holding onto cash for big miners is becoming more and more difficult. This is due to the impossibility of raising funds through the sale of shares or debts. Consequently, they hunt for more profit through possible expansions.
An example is Riot’s recent live mining facility they are building in Texas with a capacity of 1 gigawatt. This new move was the start of the project after they completed their 750 megawatt mining farm, which remains one of the largest in the US.
Reacting to the situation, Will Foxley, Content Director of Compass Mining, gives his opinion on BTC sales. He stated that miners can focus on the larger crypto environment. Hence, they see this as a wise opportunity to sell their BTC holdings in order to keep their transactions safe.
The whole saga has to do with the problems that miners face during a price drop in the market. Some miners have been ordering machines in a bullish BTC trend for months. Thus, even if the price drops, they are still expected to complete the payment.
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Matthew Schultz, Executive Chairman of CleanSpark, reports that some miners will have no choice but to liquidate their holdings.
Featured image from Pexels, charts from TradingView.com
Credit : www.newsbtc.com