Listed Bitcoin Miners Are Selling Bitcoin Reserves As Crypto Winter Comes

If Bitcoin mining companies (usually Ultimate Hodler) start selling their assets, then it must be a bear market.

Publicly traded mining companies like Marathon Digital and Riot Blockchain sold more bitcoin than they produced last month, and in the first four months of this year, they sold just 30% of the bitcoins mined by them.

"If they are forced to sell a significant portion of their bitcoins, it could further depress the price of bitcoin," Jaran Mellerud, bitcoin mining analyst at Arcane Research, wrote in a note.

In May, listed bitcoin mining companies sold more bitcoin than they produced. Source: Arcane Research

Yesterday, Toronto-based Bitfarms sold 3,000 bitcoins, almost half of its supply, in an effort to reduce its liabilities. In a press release, Bitfarms Chief Financial Officer Jeff Lucas stated that future plans will no longer place all daily bitcoin production on HODL.

"While we remain bullish on long-term appreciation in the price of Bitcoin," he said, "this change in strategy allows us to focus on our top priority of maintaining our world-class mining Continue to grow our business as expected."

In fact, listed mining companies have amassed large amounts of Bitcoin. Seven of the top 10 bitcoin vaults belong to listed miners, according to Bitcoin Treasury. Among them, Core Scientific (CORZ) has 8497 BTC; Marathon Digital Holdings (MARA) has 8,133 BTC; Hut 8 Mining (Hut) has 7,078 BTC; Riot Blockchain (Riot) has 6536 BTC; Hive Blockchain (Hive) has 4032 BTC; (BITF) has 3075 BTC; Argo Blockchain (ARBK) has 2317 BTC.

Still, it’s worth noting that listed miners account for only 20% of the Bitcoin network’s 206 million Terrahash per second (TH/s).

The hash rate of the Bitcoin network is a comprehensive measure of how much computing power is used to mine Bitcoin. Each hash means that the computer generates a new number to "guess" an encrypted string. Whichever miner (or pool of miners) guesses correctly wins the right to validate a block of transactions and add it to the blockchain.

When this happens, miners are rewarded with transaction fees. However, due to the continuous downturn in the market, the profit of mining is getting lower and lower.

Miners have struggled to earn more than $20 million per block since the beginning of the month. Revenue per block started the year at about $50 million, according to Blockchain.com, and fell to just under $40 million in early May, according to data from hedge fund Three Arrows Capital and cryptocurrency lender Celsius. That figure fell to $16 million last week amid the panic.

Source: decrypt

Original link: https://decrypt.co/103539/public-bitcoin-miners-selling-btc-reserves-crypto-winter