Publicly traded Bitcoin (BTC) miners sold almost all of the Bitcoin they mined throughout 2022, sparking debate as to whether or not the sales created “a persistent headwind” for the Bitcoin price.
Analyst Tom Dunleavy of blockchain research firm Messari shared the data in a December 26 tweet, indicating that approximately 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 January 1 to November 30 was sold.
BTC miners sell about 100% of the coins they mine
Top 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 is it a good thesis to be bullish on ETHBTC ratio trading. pic.twitter.com/L1iI6Z07p7
—Tom Dunleavy (@dunleavy89) December 26, 2022
Reserves held by mining companies have declined sharply during the second half of 2022, particularly during November, as the crypto industry reeled from the effects of the FTX fallout.
Dunleavy believes that miners constantly selling freshly produced Bitcoin are putting downward pressure on the price of the leading cryptocurrency.
However, some industry commentators, such as former BitMEX CEO Arthur Hayes, believe that the selling pressure created by the the increase in sales of Bitcoin miners is negligible.
He opined in a Dec. 9 blog post that “even if miners sold all the Bitcoin they produce each day, it would barely affect the markets.”
According to Bitcoin Visuals, on December 26 the daily trade volume for Bitcoin it was $12.2 billion. The exit from miners on the same day, according to CryptoQuant, was 919 BTC ($15.35 million), representing just 0.13% of the total volume traded.
Miner’s reserves have picked up slightly during December, rising almost 1%. The figure contributes to a view shared in a Dec. 27 post by cryptanalyst IT Tech that the miner situation appears to be stabilizing.
#Bitcoin miners – update. Is there something to worry about?
White line at the bottom: flow from the miner to the Exchange
2. Difficulty mining
3. Selling power of miners
4. 7D MA Hash Rate
— IT Technology (@IT_Tech_PL) December 27, 2022
Miners have faced significant headwinds throughout the year, with high electricity prices, falling crypto market prices, and increased mining difficulty. eat on your bottom line.
With the cost of production for miners increasing while the price of Bitcoin has declined, miners like Core Scientific have been forced to sell some of your reserves at a loss to finance its ongoing operations and efforts to expand.