Bitcoin miners sell stocks and BTC since November returns halving

Profitability of bitcoin miners has plummeted since November, and they are dumping hoards of bitcoin and company shares.

The current price of Bitcoin is about $43,500, which is about 33% lower than the all-time high of about $69,000 in June, so the time for miners to sell Bitcoin is not right. However, electricity and equipment charges must be paid.

Data from on-chain analytics firm Glassnode shows that Bitcoin miners have become net sellers, after being net holders in the previous months.

According to data from blockchain research firm Arcane Research, the two most popular mining rigs, the S9 and S19, have seen an average 50.5% drop in returns for mining one BTC since Nov. 9. This means that ROI is falling faster than the price of BTC.

The substantial increase in computing power has led to a decrease in the profitability of mining. The competition between miners is directly proportional to the computing power, because it means that more equipment has been opened to compete to find the next block.

Cointelegraph reported on Feb. 13 that Bitcoin’s hash rate has reached new highs. This milestone was achieved by jumping from 188.4 exahashes per second (EH/s) to 284.11 EH/s in one day. As of this writing, the hash rate is currently around 232.19 EH/s according to Ycharts.

Some large mining businesses have opted to boost their cash reserves or pay bills by selling shares instead of cryptocurrencies. On Feb. 11, a spokesperson for Marathon Digital Holdings Inc.’s (MARA) mining operations told Bloomberg, “We started hoarding in October 2020, and we haven’t sold a single bitcoin since then.”

Instead, Marathon filed with the U.S. Securities and Exchange Commission (SEC) to sell $750 million in stock and securities. Seeking Alpha reports that Marathon intends to use a “majority portion” for hardware purchases and general use.

MARA is currently down 0.56% and is trading at $28.24 after hours.

On Feb. 14, an analyst at wealth management firm DA Davidson told Bloomberg that there are ideological and commercial reasons why miners are reluctant to sell Bitcoin:

“Big miners would rather sell stakes because their shareholders want them to hold their bitcoin without even thinking about selling it.”