Bitcoin miners showing signs of surrender as they sell rapidly reserves hit a 2year low
Bitcoin mining is a cutthroat and costly venture that is heavily dependent on the price fluctuations of the popular cryptocurrency. During times of prolonged market downturns or consolidation, miners often find themselves struggling to stay afloat, leading some to give up on mining altogether. Recent data from MacroMicro reveals that the average cost of mining one Bitcoin is currently at $83,668.
Additionally, researchers at CryptoQuant have identified two troubling signs of capitulation among Bitcoin miners this week. Julio Moreno noted a significant increase in daily miner selling volume, with 1,200 BTC being sold over-the-counter. This method of selling bypasses traditional crypto exchanges. Ki Young Ju also pointed out that Bitcoin’s hashrate has broken an 18-month upward trend, indicating weakness in the market.
Moreover, according to data from Santiment’s Sanbase Pro, Bitcoin miners’ reserves have plummeted to levels last seen in June 2022, when the price of BTC was below $20,000. Currently, miners hold 1.8 million BTC as Bitcoin trades at $66,800, a stark contrast from the 2.01 million BTC held just before the all-time high in March.
Bitcoin mining is an industry that heavily relies on economies of scale, making it difficult for medium and small players to turn a profit. Many miners resort to strategies such as hedging with energy futures contracts or leveraging themselves with borrowing or selling shares. Some even supplement their income by selling mining equipment or collecting fees from mining pools. However, these challenges often lead to increased centralization in the industry, favoring larger entities over smaller ones.
