Bitcoin miners are selling their coins at a record pace after the top cryptocurrency by market cap fell to its lowest price in 2022 this month.
According to Charles Edwards – founder of Capriole fund – Bitcoin miner sell pressure has skyrocketed by 400% within 3 weeks alone.
His data is backed up by a similar finding from Glassnode, which showed total miner balances plummeting to a 10-month low this week. Their holdings are now worth roughly $30.4 billion, representing almost 10% of Bitcoin’s supply.
It’s a Bitcoin miner bloodbath.
Most aggressive miner selling in almost 7 years now.
Up 400% in just 3 weeks!
If price doesn’t go up soon, we are going to see a lot of Bitcoin miners out of business. pic.twitter.com/4ePh0TIPmZ
— Charles Edwards (@caprioleio) November 21, 2022
“If price doesn’t go up soon, we are going to see a lot of Bitcoin miners out of business,” said Edwards.
Mining companies depend on Bitcoin’s fixed 6.25 BTC block reward as their source of revenue. A block is mined approximately once every ten minutes using computational power.
As mining becomes a more competitive industry and network difficulty rises over time, participants must seek out more energy-efficient mining resources to stay profitable.
This task becomes more difficult during a bear market when the Bitcoin produced by each block is worth significantly less in dollar terms.
As such, multiple major mining firms have been forced to sell vast amounts of Bitcoin throughout 2022 in order to stay afloat, after steadily accumulating in 2021.
“What we are seeing is not sustainable,” continued Edwards. “Mine-and-hodl is not a viable strategy as a Bitcoin miner… you need to manage (trade) your Bitcoin position constantly in this market.”
Last month, miners including Core Scientific and Iris Energy confirmed that they would likely be unable to pay off their debt on rented ASIC machines in November. The former suggested that it could file for bankruptcy.