During the bull market, Bitcoin miners tend to hold most of their mined Bitcoin. However, amid the current market crash, the world’s largest cryptocurrency broke below the $20k price point for the first time in 18 months, many miners were forced to sell Bitcoin to cover business expenses.
According to a report from blockchain analytics firm Arcane Research, in the first four months of 2022, miners sold off 30% of their mined Bitcoin. The sharp drop in mining profits forced these companies to increase their selling rate to more than 100% in May – the time when Bitcoin mining revenue recorded its lowest level in 2022.
As the crypto market continues to get worse in June, Bitcoin miners are likely to sell more in the near future. It should be noted that miners currently account for 20% of the global Bitcoin hashrate that really puts the market into the red zone if they take any negative action.
Meanwhile, according to CoinMetrics data, miners are always considered to be one of the largest “whales” in the industry, holding around 800,000 Bitcoin. Therefore, assuming they are forced to liquidate a significant amount of their Bitcoin holdings, it could drive the Bitcoin price even lower.
This is most likely to happen as a number of mining companies have started to officially announce their business status as well as strategies for dealing with Bitcoin. On June 22, Bitcoin mining giant Bitfarms admitted to selling 3,000 BTC to pay off debt. Bitfarms also revealed that the company will no longer maintain its strategy of HODLing all mined Bitcoins daily (approximately 14 BTC). Instead, it plans to sell them to enhance the liquidity and balance their business budget.
However, unlike Bitfarms, another Bitcoin mining giant, Marathon, claimed they will continue to accumulate more Bitcoins and says that it has not sold any of its BTC since October 2020. At the time of writing, Marathon holds about 9,941 BTC, worth about $200 million.
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