Bitcoin mining companies are now being hit hard by the price of BTC which continues to fall. The reason is, with significantly decreased cash flow forces them to sell Bitcoin to cover operational costs.
The large mega deposits owned by Bitcoin miners that have been hoarded since 2021 are now rumored to have gone to the market. In fact, a new problem has now arisen because their BTC assets are not as much as they used to be.
Bitcoin miners ‘dump’ their assets
In the last three months, News BTC reported that many Bitcoin miners have sold thousands of their assets. This has caused concern because the amount being sold is greater than what they are earning.
On September 2, blockchain data aggregation company CryptoQuant revealed that bitcoin miners had sold around 4,586 BTC in 3 days. At that time, the value of Bitcoin was still above US$20,000.
Then in July, public bitcoin miners again conducted a mass sell-off of around 5,700 BTC.
This trend is expected to continue into August as miners are still overwhelmed by fears of deteriorating market trends. By the third week of August, they had dumped more than 6,000 BTC.
This sell-off of BTC deposits is done to keep public bitcoin miners from going bankrupt. However, at the same time, they could potentially lose money as they run out of assets.
Miners’ Deposits Are Almost Depleted
Currently, miners are estimated to have sold the majority of their assets. Sales that are considered reasonable due to current market conditions.
However, once again, the main problem is that they sold more Bitcoin assets than the amount of BTC they generated.
The companies that suffered the most were Marathon Digital and Hut 8. At the end of March 31, before they started selling BTC, both companies’ balances were huge.
However, just three months later, Marathon Digital had sold more than 60% of their and Stronghold’s BTC holdings. While Hut 8 sold around 40% of its holdings then Core Scientific sold around 33% of its assets.
However, not all miners followed this trend. In fact, some miners choose to retain assets and even increase the number of their holdings.
One of them is Riot Blockchain, which has almost doubled its holdings in the last 3 months. In another example, Cleanspark recorded an increase of about 15% in its BTC balance.
Although this BTC sell-off was done to balance the company’s balance sheet. Some are now in danger of losing their assets completely due to their small amount of Bitcoin, as Stronghold has experienced.
They will find it difficult to get back on their feet due to the very limited availability of assets.
Bitcoin is Close to the Bottom
Analysis with various method models is currently estimated that there will still be the formation of the base or bottom value of Bitcoin. The delta method estimates that BTC’s potential bottom is just below US$15,000 or slightly lower.
This model is the most likely, given past price movements. Meanwhile, CryptoQuant estimates that the projected price of BTC is around $14,478.
However, the question of whether Bitcoin will plunge further in the near future remains a mystery. A series of macroeconomic factors that are suppressing the world economy are currently subjecting crypto exchanges to an unprecedented amount of turbulence.