Here’s Bitcoin miners’ plan to survive the crypto-crisis (to make ends meet)
Bitcoin [BTC]‘s ongoing bearish streak has significantly affected not just holders, but even miners. Bitcoin miners turned into net sellers of Bitcoin, with miner inventories dropping to new lows. Miners might not necessarily turn bearish “en masse,” although some did look to offload excess inventory. Or, is it really the case?
Bitcoin miners have been distributing their holdings of BTC during the recent sell-off, albeit at a slower pace compared to how it was earlier this year.
The chart attached herein shows the 30-day change of BTC supply held in miner addresses, according to data compiled by Glassnode.
Source: Glassnode
Here, the red dip hinted at Bitcoin miners becoming net sellers, after being net HODLers for months. Indeed, May and June both saw this changing narrative.
In May 2022, public mining companies sold 4,411 Bitcoins. This figure is four times more than the average for January to April 2022. Financial statements of public mining companies showed that they had to quadruple BTC sales to make ends meet.
Source: NYDIG
The decline in BTC miners’ revenue could be a key reason behind this scenario. Miners’ balances have recently declined at a peak rate of 5k to 8k BTC per month (or roughly $150 million to $240 million worth of BTC at $30k).
Currently, the total miner revenues barely amount to even close to what it was before. This is evident in the graph below –
Source: Glassnode
In addition, electricity prices are rising, given the inflation scars. Furthermore, the profits of miners fell along with cryptocurrency rates. Ergo, this effort at distribution is to offset further losses.
Also, Bitcoin mining hashrate observed a fall during the month of June as miner revenues continue to stay low. The “mining hashrate” is an
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