Bitcoin miners have began selling their holdings on the open market in response to the precipitous decline in the cryptocurrency’s value. According to a report by Bitcoin miner Compass Mining, a number of U.S.-based miners have began selling their holdings on the open market.
In addition to a fall in Bitcoin pricing, miners are also facing an increase in mining difficulty. This diminishes mining’s profitability.
The profitability of Bitcoin mining has plummeted to its lowest level since the middle of 2020, with Bitcoin prices hanging at comparable lows.
According to statistics from Coinmetrics, miner flows to exchanges have hit their highest level since January, as reported by Compass. Before March, the selling had preceded a precipitous drop in the price of Bitcoin during the following month.
Cathedra, a miner from Canada, is the most recent to sell the token. According to its most recent financial report, the miner sold 235 tokens in May for a total of $8.8 million, almost all of its holdings.
The firm said that the sales were to “isolate itself” from further price decreases. It currently has around 3.7 tokens.
Miners may begin selling Bitcoin they have accumulated on the open market. At the very least, they are suffering following the most recent significant price decline. Coupled with a downward difficulty adjustment, which indicates that miners are shutting down, it seems that profitability has reached a ceiling for miners.
Analyst for Compass Mining Mitch Klee
With Bitcoin now undoing a recent relief surge, market mood has generally deteriorated. For over a month, the token has failed to surpass $30,000 in value.
While a new research implies that the market bottom may have been reached, recovery will be very tough. Due to the Federal Reserve’s policy tightening, increasing inflation, and the Russia-Ukraine conflict, Bitcoin is expected to see a strong ascent to past highs.
Nonetheless, when Ethereum transitions to a proof-of-stake mechanism in 2018, Bitcoin may witness an infusion of miners from the latter.