Publicly traded Bitcoin miners sold virtually everything they mined in 2022, but appear to have resumed reserves accumulation.
Throughout 2022, publicly traded Bitcoin miners sold virtually all of the Bitcoin they mined, sparking a discussion over whether the sales provided a “permanent headwind” for the Bitcoin price.
In a Dec. 26 tweet, analyst Tom Dunleavy of blockchain research firm Messari revealed that about 40,300 of the 40,700 BTC mined by Core Scientific, Riot, Bitfarms, Cleans Park, Marathon, Hut8, HIVE, Iris Energy, Argo, and Bit Digital from Jan. 1 to Nov. 30 were sold.
BTC miners sell roughly 100% of the coins they mine— Tom Dunleavy (@dunleavy89) December 26, 2022
The 10 public bitcoin miners
detailed here mined ~40.7k BTC and sold ~40.3k in 2022
This is a persistent headwind for BTC and for no other reason a good thesis to be bullish the ETHBTC ratio trade pic.twitter.com/L1iI6Z07p7
Mining businesses’ reserves fell significantly in the second half of 2022, notably in November, as the crypto sector suffered from the repercussions of the FTX catastrophe.
Dunleavy argues that miners selling off newly created Bitcoin on a regular basis puts downward pressure on the price of the main cryptocurrency.
However, other industry observers, including BitMEX’s former CEO, Arthur Hayes, argue that the increasing sales of Bitcoin miners produce insignificant selling pressure.
In a blog post published on December 9, he stated that “even if miners sold all of the Bitcoin they created each day, it would scarcely affect the markets at all.”
According to Bitcoin Visuals, the daily trading volume for Bitcoin on December 26 was $12.2 billion. According to CryptoQuant, the outflow from miners on the same day was 919 BTC ($15.35 million), representing only 0.13% of the entire value exchanged.
Miners’ reserves increased by roughly 1% in December, indicating a minor recovery. The data supports the perspective expressed by crypto analyst IT Tech in a Dec. 27 report that the situation for them looks to be stabilizing.
#Bitcoin miners – update. Is there anything to worry about?— IT Tech (@IT_Tech_PL) December 27, 2022
White line on the bottom – miner to Exchange flow
2. Mining difficulty
3. Miner selling power
4. Hashrate 7D MA
They have encountered considerable headwinds this year, with increasing power rates, dropping crypto market prices, and increased mining difficulty eroding their profits.
With the cost of production for miners rising while the Bitcoin price falls, miners like Core Scientific have been obliged to sell part of their reserves at a loss in order to support their continued operations and expansion attempts.