According to a new prediction from Arcane Research, a company dedicated to the analysis of cryptocurrencies, miners will continue to sell more BTC than they earn.
Miners have sold nearly 30% of their record BTC holdings since May
The rally to $25,000 this month eased the pressure on a Bitcoin mining sector that has struggled throughout 2022.
At one point, fears abounded that the miners’ cost of production would be much higher than the spot price of Bitcoin, and that there would be heavy selling to keep the miners afloat. Worse yet, many may have to withdraw altogether because their activities were no longer economically viable.
Data from the period since May seem to confirm that a lot of turmoil is taking place. As Arcane points out, a single public miner (Core Scientific) sold around 12,000 BTC in the period from May to July.
Although the trend showed signs of reversal last month, even higher BTC prices will be needed for even the largest miners in the market to be able to hold again.
“Even though public miners sold less than half the amount in July than they did in June, we still see them depleting their holdings if you look at the percentage of bitcoin production sold,” the Arcane analyst explained; Jaran Mellerud.
“Public miners sold 158% of their bitcoin production in July, making it the third month in a row that they sold more than 100% of production.”
For context, in April 2022, coins held by miners were at an all-time high, thanks to years of saving at least 60% of the BTC received through block rewards each month.
However, after subsequent sales, your balance tends to be 30% lower, and will only go up until your monthly spending balance is restored.
“I expect the selling pressure to continue at 100% to 150% production, unless something significant happens with the price of Bitcoin. This equates to 4,000 to 6,000 BTC a month,” Mellerud added.
Bitcoin (BTC) may be up 36% from its June lows, but for miners, the pain will continue.
Light at the end of the tunnel
As we told you before, the much-needed return to better days for miners could be closer than it seems.
Revenue soared nearly 70% in August, while Proof-of-Work mining in general is increasing in importance beyond the crypto sphere.
Environmental concerns no longer hold back big investors, as evidenced by the fact that the world’s largest asset manager, BlackRock, praised the sector this month.
Meanwhile, the steady improvement in Bitcoin fundamentals provides real-time proof that the situation is stabilizing for the backbone of the Bitcoin network. Data from BTC.com estimates that the difficulty will increase by around 0.7% this week.
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