Bitcoin miners convert 5day mining earnings into cash within only three days during market selloff

Bitcoin miners have been selling off their reserves, with the equivalent of five days’ worth of mining being sold in the last three days. This trend of capitulation among miners has been ongoing since the halving in April, as the production cost increased and the mining reward decreased. In May, we warned of an incoming capitulation as miners’ revenues dropped to a six-month low, and this warning has proven to be accurate. Mining reserves have reached a concerning two-year low.

The sell-off has also been accompanied by a drastic fall in hashrate. This indicates that miners are hinting at a short-term exit strategy. Meanwhile, the United States government has started selling part of its Bitcoin reserves, and Germany has followed suit by getting rid of large batches of BTC. Germany has already transferred more than 2332 BTC, worth over $145 million, since July 1.

In addition to these selling pressures, the defunct Mt. Gox is preparing to initiate its creditors’ repayments, which is expected to result in significant selling pressure amounting to around $8 billion. As a result, Bitcoin investors should exercise caution and expect a volatile month, with potential capitulations and continued sell-offs of BTC.

Disclaimer: This article does not provide investment advice and investing in Bitcoin carries risks.