In The Midst Of The Cold Crypto Winter, Bitcoin Miners Sell Their Holdings!
In the midst of the cold crypto winter, most of the bitcoin miners have been collectively selling around 100% of their entire output in May. This action by bitcoin miners is because of the collapse in the value of bitcoin by around 45%. According to a crypto analyst at Arcane Research, Jaran Mellerud, “the plummeting profitability of mining forced these miners to increase their selling rate to more than 100% of their output in May. the conditions have worsened in June, meaning they are likely selling even more”.
Joe Burnett, an analyst at bitcoin mining startup Blockware Solutions, says hash rate and mining difficulty have risen while bitcoin’s price has fallen. These are both negatives for existing miners as both works to compress margins. Bitcoin bottoms have been marked at the end of the miner capitulation, which could be a sign that the miners that can survive this capitulation have a light at the end of the tunnel”.
In The Midst Of The Cold Crypto Winter, Bitcoin Miners Sell Their Holdings!
Most bitcoin assets and prices have dropped 50% or more recently. But a majority of crypto believers used this situation to buy more crypto assets. However, some people still remember the crypto winter that occurred between early 2018 and mid-2020. At that time the prices of crypto assets went down and stayed down. Due to this most of the innovations in crypto came to a halt.
While most of the Bitcoin miners are selling off their assets, the traditional miner who makes use of older technology such as more-energy intensive machines and does not have balance sheets are struggling in this situation. Amidst this situation, Bitcoin’s mining difficulty decreased by 2.35% this week. Charlie Schumacher, the spokesperson for Marathon Digital Holdings Inc, says bitcoin mining is a zero-sum game. If you can continue running when others cannot that means you have a larger share of the pie. Marathon has not sold bitcoin since October 2020”.
Various analyses, research, and indicators suggest Bitcoin’s price has dropped 60% since early November. Some crypto analysts doubt whether this marks the beginning of a long winter or is this a short winter after spring to just pause and refresh.
The senior research analyst at D. A. Davidson, Chris Brendler points out that, “if you are not at a very low-cost electricity area at this point, you have got to shut down”. Besides all these declines and market crashes, shares of some publicly listed miners have been battered more than the value of the Bitcoin.
