Decline in Bitcoin Miner Reserves
Bitcoin miner reserves have achieved the historical low of 1.90 million BTC since June 19, 2024, which was more than 14 years ago. This severe decrease marks the weakest point since February 2010 and was part of the continued threat to the digitization of assets, as miners have lessened their balances. Despite a sharp decline in Bitcoin reserves, their fiat value is reaching the highest point ever, approximately $135 billion.
According to IntoTheBlock, miner reserves fell from 1.95 million BTC at the start of the year to 1.90 million BTC as at the middle of June. The halving event that occurred on April 20, 2024, when a mining reward was cut from 6.25 BTC to 3.125 BTC, is listed as a possible reason for the decrease.
Outumuro, in reference to miners, had this to say:
“Miners take less Bitcoin home on average as the halving incident marginizes them”.
After every around four-year interval, halving takes place, and rewards reducing it by half are hitting miners very hard.
Nevertheless, the expert mentioned one saving grace – historically speaking, the reserve decrease happens in a slower manner, thus reducing the impact of selling sharks. He opined,
“In the past, on the other hand, if it was happening, it took place, so it was not any kind of a situation that would have caused such problems”.
The reserves might have been notably reduced but still, their dollar value is very high as Bitcoin has gained in price. Sascha of Green Mining DAO has expressed his observation of how the industry has responded to these trends:
“Today’s miners are no longer investing in risky innovations. Along with that, they are no longer clinging to Bitcoin at any cost, which will only be the same strategy as it was in the past when it became more vulnerable”.
Rising Market Capitalization Amid Declining Reserves
On the one hand, the size of Bitcoin held by miners has gone down, but some US-based Bitcoin mining companies have hit through it and now increase their market capitalization. Moreover a total of $22.8 billion was the MC of companies’ recorded as the highest in June 15, 2024.
Core Scientific, TeraWulf, and IREN were the companies that saw their stock prices surge the most, and they scored 117%, 80%, and 70%, respectively. Even if the stock prices are going up, miner revenue and reserves are decreasing, which is a proof of the conveying the impacts on the halving of the market and on the dynamics.
According to the analysis of Glassnode, the decrease in the Bitcoin miner bitcoin balances has been the trend of the last weeks, and now they are at 1.8 million BTC. The continuous sell-off now captures the miner’s strategy shift from the fact that they are now focused on maintaining a financial equilibrium rather than the long-time accumulation of Bitcoin.
Bitcoin Miners Face Extended Sell-Off Period
According to CryptoSlate’s lead analyst, James Van Stratten, one of the most recent big sell-offs experienced by miners is currently the one that they face and the situation is similar to that one which took place four years ago. The market for Bitcoin, as of June 17, has reached 33 days into what is known as a miner capitulation, which usually lasts for about 41 days, on average.
On the other hand, miner capitulation is a phenomenon in which Bitcoin miners are either shutting down their machines or selling the BTC to achieve the operational status, thus signaling that the business is not profitable. The major hindrance that miners have been facing to earn profits is the halving of April’s Bitcoin, where the block subsidy got reduced from 6.25 BTC to 3.125 BTC per block. After April 19, the average daily return for miners went down from roughly 900 BTC to 450 BTC. Network fees, however, remain the same and are quite minimal, although they are a revenue source for miners.
Through the years, mining has turned into an almost impossible task with only a few operators that are able to realize economic viability. The digital era and the fact that it is a space where they have made large bets did not alleviate the tough period for the mining firms. In fact, the data provided by those on-chain indicate that they also are the main sellers, the coin margins getting tighter and tighter.
According to the miners, the big part of them have done the OTC trades. Specifically, there were 1200 Bitcoin sold who were the main players from there. The first one was the Marathon Digital, the largest publicly traded miner.
On June 18, Bitcoin’s price decreased by 2% reaching roughly $65,152. But today, Bitcoin is still trading around $65,100 with an intraday low of $64,700, which occurred during the minimum amount of hedge funds managed by Bitcoin since October 2020, and has currently increased the selling pressure.
Of the fact that the price has rapidly and dramatically fallen, the short-term trading average which means that $66,000 is the new resistance level. At the moment of this typing, Bitcoin is trading at $65,660. It has not managed to go beyond this new level despite this fact.
