Latest Posts

Bitcoin miners are forced to sell to cover operating costs

- Advertisement -


👋 Would you like to work with us? Cryptooshala is recruiting for several vacancies!

Bitcoin miners are selling their profits to keep up with rising operating costs. As electricity prices continue to rise and Bitcoin follows a downtrend, miners can no longer afford HODL.

Bitcoin Miner Wallet Balances
- Advertisement -

The sell-off trend started in early 2022 as shown in the chart above. At the time, experts noted that miners sold their profits because they expected bitcoin to continue to fall.

- Advertisement -

They were right. When bitcoin reached its 18-month low on June 14, mining hardware manufactured before 2019 lost profitability. At the time of writing, Bitcoin is trading at around $20,170, which is near the bottom price of profitability for the 2021 Antminer S19j model.

Impossible HODL

- Advertisement -

Secret research data indicates that public bitcoin miners receive about 900 bitcoins daily. They strive to keep as much as possible and become one of the largest whales on the market.

However, rising energy costs and declining bitcoin prices are putting government miners in a difficult position.

Bitcoin is being sold by public miners

According to the figures, public mining companies sold 30% of their bitcoin production during the first four months of 2022.

Markus Sotiriou, an analyst at digital asset broker GlobalBlock, commented on the sell-off trend and said that the main reason for the sale was:

“due to declining profitability with rising electricity prices, so they are forced to liquidate some of their bitcoin to cover operating costs.”

Another Glassnode analyst noted that other miners were also sellers. He said:

“Miner balances stalled after an uptrend in accumulation in 2019-2021 and turned into a decline. Last week, miners spent about $9k from their coffers, compared to about $60k in bitcoin.”

The sale was expected

Despite the severity of the data pointing to a sell-off trend, experts note that miners usually behave this way during a bear market.

Miners tend to pile up in a bull market and sell in a bear market to cover interest payments or pay higher costs. For example, in the last bear market in November 2018, miners sold a significant amount of their coins while bitcoin was falling.





Credit : cryptoslate.com

- Advertisement -

Latest Posts

Don't Miss