Bitcoin Miners Dump BTC as Prices Fall

According to sources, the disparity between corrected Bitcoin prices, rising electricity costs, and rig maintenance requirements is prompting miners to liquidate their BTC stockpiles, raising concerns that the network’s hash rate may suffer in the coming weeks.

It should be remembered that Bitcoin miners made a lot of money in November 2021, when prices hit an all-time high of $69k on various platforms, including Binance. Six months later, BTC is under heavy selling pressure, trading below $25k at the time of publication.

On-chain data from GlassNode, an on-chain analytical company, reveals that Bitcoin miners’ earnings has dropped by more than half from its peak in November 2021.

As a result, Bitcoin miners have resorted to selling their BTC holdings in order to cover mounting operational expenses as their revenue declines due to Bitcoin’s price drop, rising electricity, and maintenance costs. Because miners are among the largest BTC holders, their actions put additional pressure on prices, dampening bulls’ hopes.

BTC miners have been ramping up, increasing to their reserves, according to GlassNode.

Following the LUNA and UST “Black Swan” event in early May, GlassNode has observed a net distribution of around 6k BTC.

According to analysts, this action is intended to cover bases and respond to high operational expenses in light of the overall gloomy sentiment. Sellers are concerned that BTC prices may fall further into the $20k range.

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The decline in Bitcoin’s price has had a significant impact on their revenue sources, which have more than halved since November of last year.

What the Future Has in Store for Miners

With over 19 million BTC in circulation and hash rate remains at record levels, analysts predict that Bitcoin and crypto mining will be risky in the future. So far, the Bitcoin hash rate has remained high at around 200 EH/s, however revenue has slowed owing to market price declines.

New miners may struggle to be profitable in the coming weeks if Bitcoin’s price continues to stay low. In the current market conditions, most will likely turn off their rigs and wait for prices to recover. With a decreasing hash rate, the Bitcoin network would most likely adjust its difficulty to account for miner attrition.