Bitcoin Miners Hold 2,000 BTC Post-Halving

Industry experts have reportedly expressed a positive outlook for Bitcoin miners following the recent Bitcoin halving in April. Historically, the period after a halving can be challenging for miners due to reduced mining rewards and its impact on profitability. However, experts suggest that Bitcoin miners are optimistic about the current market conditions.

Sascha Grumbach, founder and CEO of Green Mining DAO, allegedly noted that Bitcoin miners are anticipating a price rally following the halving. He pointed out that similar rallies have occurred “within three to six months after each halving event.” Despite the usual expectation that miners might sell their Bitcoin holdings to maintain operations, a different trend has emerged. Major mining firms have been holding onto their Bitcoin reserves, as highlighted in Bitwise’s Q2 report.

Selling Trends by Bitcoin Miners

In the first quarter of 2024, the five largest Bitcoin mining firms reportedly sold approximately 2,000 BTC, the lowest amount in two years. This was a significant drop compared to over 7,000 BTC sold in the fourth quarter of 2023. By June, this trend of minimal selling allegedly continued, with little to no activity in terms of offloading Bitcoin holdings.

The optimism among Bitcoin miners is said to be influenced by the rise in institutional interest. The introduction of Bitcoin exchange-traded products in the United States has attracted $17.71 billion as of July 29. Grumbach commented, “Institutional investments are seen as a validation of Bitcoin’s value and potential, leading to increased demand and price stability. Miners, recognizing this trend, prefer to accumulate rather than sell, anticipating a more favorable market environment in the near future.”

Additionally, Jonathan Hargreaves, global head of business development & ESG at Elastos, reportedly observed similar sentiments within the mining sector. He stated, “Our merge miners and mining contacts are all expressing a strong belief that the market is about to experience a significant upward surge. As a result, they’re all holding onto their positions until the market makes its move.”

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On the other hand, smaller Bitcoin miners face greater challenges, particularly due to increasing mining difficulty that requires hardware upgrades for better efficiency and profitability. This has led smaller miners to offload parts of their Bitcoin holdings to manage operational costs. CryptoQuant’s head of research, Julio Moreno, noted that some miners even had to cease operations due to rising costs.

Andy Fajar Handika, CEO and co-founder of Loka Mining, explained that newer mining companies, which were unprepared for the volatility post-halving, have been more significantly affected. These conditions have led some miners to explore less competitive markets, such as artificial intelligence, to utilize their existing infrastructure more effectively.

As July ends, the situation appears to be improving. According to a Bitfinex Alpha report from last week, Bitcoin miners have returned to profitability for the first time since the halving. This improvement is attributed to the adoption of newer, more efficient mining equipment, which has enhanced profit margins. The Bitcoin mining hashrate, which had previously fallen to levels seen during the 2021 China mining ban, is also on the rise, according to Matrixport.

The Future Outlook of Bitcoin Minors 

The ongoing economic conditions and policy developments, such as President Donald Trump’s proposals for Bitcoin to be a national reserve asset, are seen as bullish for the mining industry. Marathon Digital Holdings, for example, added $100 million worth of Bitcoin to its reserves in late July, reflecting confidence in the market.

Other top Bitcoin miners have also reportedly retained their Bitcoin reserves. Riot, for instance, has not sold any Bitcoin since January, and CleanSpark has only sold small amounts of its holdings. Handika from Loka Mining predicted that miners will continue to accumulate Bitcoin, anticipating “limited selling pressure” near Bitcoin’s next all-time high.

Hargreaves from Elastos projected that selling pressure could emerge around the $125,000 per Bitcoin mark, with miners potentially beginning to “dollar-cost averaging” into profits. This figure represents an approximately 86% increase from Bitcoin’s current price of $66,928. He noted that the timing of this could depend on the speed of Bitcoin’s price growth, potentially occurring by the end of 2024 or extending into 2025. Stay updated with crypto news with TheBITJournal.