Bitcoin Miners Sell Their Holdings Amid Crypto Winter’s Chill

Best Online Casino Sites Malaysia, Best Betting Sites Malaysia, Best Online Betting Sites Malaysia, Best Sports Betting Sites Malaysia

Bitcoin miners have been forced to tap into their cryptocurrency stashes as a plunge in prices, rising energy costs and increased competition bite into profitability.

The number of coins miners are sending to crypto exchanges has been steadily climbing since June 7, researchers at MacroHive noted, in a sign that “miners have been increasingly liquidating their coins on exchanges.”

Several publicly listed bitcoin miners collectively sold more than 100% of their entire output in May as the value of bitcoin tumbled 45%.

“The plummeting profitability of mining forced these miners to increase their selling rate to more than 100% of their output in May. The conditions have worsened in June, meaning they are likely selling even more,” said Arcane analyst Jaran Mellerud.

Bitcoin miners, who run networks of computers to earn tokens by validating transactions on the blockchain, are typically staunch crypto “HODLers” and collectively own around 800,000 bitcoins, according to CoinMetrics data.

The crypto mining space rapidly expanded in 2021 as bitcoin more than quadrupled in value, but this growth has further pressured margins as the process is designed to grow more difficult as the number of miners increases.

“Over the past six months, hash rate and mining difficulty have increased while the price of bitcoin has dropped. These are both negatives for existing miners as both work to compress margins,” said Joe Burnett, analyst at bitcoin mining firm Blockware Solutions.

High energy prices are also hitting miners, which by some estimates use more electricity than the Philippines, according to the Cambridge Bitcoin Electricity Consumption Index.

“If you’re not at a very low-cost electricity area at this point, you’ve got to shut down,” noted Chris Brendler, senior research analyst at D.A. Davidson.

Bitfarms, Riot Blockchain and Core Scientific are among companies that announced sales, with Bitfarms’ chief executive officer saying the company is “no longer HODLing daily bitcoin production.”

Shares of publicly listed miners have been battered even more than bitcoin, with the Valkyrie Bitcoin Miners ETF falling 59% this quarter compared to 53% drop for bitcoin.

Some miners, including Bitfarms, are using proceeds to negotiate financing agreements to fund operations and make payments on expensive mining equipment.

If miners have already paid two-thirds or even 70% of the price of these millions of dollars in machines, they wouldn’t want to miss the final installments, which makes them desperate for financing, Brendler said.

Top-rated Sites
BK8 | Best Betting Site Malaysia | Online Betting Site Malaysia | Best online sport betting site Malaysia
BK8

BK8 adalah salah satu platform gaming online terkemuka di Asia yang menawarkan Taruhan Olahraga, Kasino Langsung, Poker, Slot, E-Olahraga, dan Lotere. BK8 terpilih sebagai Kasino Online Terbaik di Asia pada tahun 2017.

W88 | Best Betting Site Malaysia | Online Betting Site Malaysia | Best online sport betting site Malaysia
W88

W88 adalah sponsor utama Crystal Palace FC dalam Liga Primer Inggris. W88 dikenal karena dapat dipercaya, bonus yang murah hati, dan berbagai pasar dengan peluang kompetitif

M88 | Best Betting Site Malaysia | Online Betting Site Malaysia | Best online sport betting site Malaysia
M88

M88 or Mansion88 is among the famous betting companies in Asia, having partnered with several EPL teams as well as Spanish La Liga & Badminton World Federation (BWF).

UEA8 | Best Betting Site Malaysia | Online Betting Site Malaysia | Best online sport betting site Malaysia
UEA8

UEA8 is fast catching up as Southeast Asia best online betting site with plenty of game selections to choose from such as Sports Betting, Live Casino, Slots, E-Sports, Lottery.