Bitcoin miners are liquidating their holdings of stock and bitcoin as profits have halved since November
Miners are becoming cash-strapped and in desperate need of a boost, since the price of Bitcoin has declined significantly since November, and income has plummeted even more owing to greater competition.
Bitcoin miners are liquidating their currency holdings and stock in their firms, as mining revenue has plummeted since November.
Miners are selling at an inopportune moment, with Bitcoin (BTC) presently trading about $43,500, or 33% below the all-time high (ATH) of over $69,000 set that month. Electricity and equipment bills, on the other hand, must be paid.
According to data from on-chain analytics startup Glassnode, Bitcoin miners have shifted from net hodlers to net sellers after months of being net hodlers.
Since Nov. 9, the return on mining one bitcoin has plummeted by an average of 50.5 percent for the two most popular mining machines, the S9 and the S19, according to Arcane Research. This indicates that the rate of return on investment has declined faster than the price of BTC.
A significant rise in hashrate has led to mining’s decreased profitability. Competition amongst miners grows proportionately with hashrate, since it indicates that more devices have been activated to compete for the next block.
On Feb. 13, Cointelegraph announced that Bitcoin has set a new ATH in terms of hashrate. That milestone was attained by rapidly increasing from 188.4 to 284.11 exahashes per second (EH/s) in a single day. According to Ycharts, the hashrate is now about 232.19 EH/s.
Several significant mining companies have chosen to enhance their cash reserves or pay their bills via the sale of stocks rather than cryptocurrency. According to Bloomberg, a representative for the Marathon Digital Holdings Inc. (MARA) mining company said on Feb. 11: “We began hodling in October 2020 and have not sold a single satoshi since then.”
Rather than that, Marathon filed a registration statement with the Securities and Exchange Commission (SEC) to sell $750 million worth of stocks and securities. According to Seeking Alpha, Marathon wants to use a “significant percentage” of the proceeds to acquire hardware and for other corporate reasons.
According to Bloomberg on Feb. 14, an analyst at asset management company D.A. Davidson said that miners are hesitant to sell Bitcoin for ideological and commercial reasons:
“Big miners would rather sell equities than risk losing their Bitcoin, since their shareholders want them to keep it and not even consider selling.”