The bitcoin blockchain comes to life, the miners sell off their BTC holdings

The bitcoin blockchain is coming to life as big miners sell some of their positions, say analysts at Arcane Research. Bitcoin's cash flow reaches new lows. The decline in mining profitability is forcing public mining companies to sell their holdings to BTC.

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The profitability of Bitcoin mining is declining rapidly

The extremely high profitability of mining resulting from the transformation of the market following the mining ban in China has spurred massive investment in new mining equipment. The number of ASICs connected to the network increased, leading to an increase in the hashrat, while the price of BTC dropped significantly.

The increase in hashrat against the background of the fall in the price of BTC has led to a decline in profitability of mining to levels not seen since 2020. Antminer S19 generates 80 % less than at its peak of November 2021. Older generation machines now show completely negative yields.

Mining companies have relatively low production costs due to access to cheap electricity and the use of new energy efficient equipment. This means that they do not risk shutting down their machines, but declining profitability will make it more difficult for them to raise funds, which is likely to end their grand expansion plans. Survival is on the agenda right now.

We are already seeing a significant increase in BTC sales from publicly traded mining companies.

The miners are selling off their BTC holdings

The miners "mine" 900 BTC a day and try to keep as many coins as possible on their balance. The irony is that despite hodling ambitions, they have to sell their rare BTCs in bear markets: at some point, the market will simply force them to do so.

In the first four months of 2022, public mining companies sold 30 % mined BTC. The sharp decline in mining profitability forced these miners to sell more than 100 % mining volumes in May. In June, market conditions worsened, which means that sales from miners should increase by the end of the month.

According to CoinMetrics, miners are one of the largest whales on the bitcoin market, owning a total of 800,000 BTC. If they are forced to liquidate most of these holdings, this could lead to a further drop in the price of BTC.

The bitcoin blockchain comes to life

Miners' daily income continues to fall rapidly due to the fall in the price of BTC. It is now $ 18 million, which is 32 % less than just seven days ago ($ 27 million). While the total income of miners is declining, the volume of fees collected for transactions increased by 17 % to 440 thousand USD The share of fees in the total income of miners at the beginning of the week is 2.4 %, which is the highest since July 2021.

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