News sources report that industry experts have painted an optimistic picture for Bitcoin miners after the latest Bitcoin halving in April. It has been evident in the past that the time after a halving can be tough for miners due to fewer mining rewards and its effect on profitability. However, experts suggest that Bitcoin miners are positive about the current market circumstance.
Sascha Grumbach, founder and CEO of Green Mining DAO, reportedly stated that Bitcoin miners expect a price rally after the halving. He went on to say 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 keep up with operations, a different trend has surfaced. Major mining firms have been found to hold onto their Bitcoin reserves, as showcased in the reported Bitwise’s Q2 report.
Selling Trends by Bitcoin Miners
In the first quarter of 2024, the five largest Bitcoin mining firms reportedly liquidated around 2,000 BTC, the lowest amount in two years. This was a significant drop relative to more than 7,000 BTC sold in the last quarter of 2023. By June, this trend of minimal selling allegedly went on, with meagre activity around offloading Bitcoin holdings.
Moreover, the positive sentiment among Bitcoin miners is also affected by the hike in institutional interest. The introduction of Bitcoin exchange-traded products in the United States has secured a reported $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.”
Sector Sentiment
Jonathan Hargreaves, global head of business development & ESG at Elastos, allegedly 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.”
Contrarily, smaller Bitcoin miners come across greater challenges, particularly due to increasing mining difficulty that needs hardware upgrades for augmented efficiency and profitability. This has cause the smaller miners to offload parts of their Bitcoin holdings to cover operational costs. CryptoQuant’s head of research, Julio Moreno, reportedly noted that some miners even had to cease operations due to rising costs.
Adjustments by Newer Miners
Andy Fajar Handika, CEO and co-founder of Loka Mining, stated that younger mining companies, which were not prepared for the market volatility that followed the halving, have had it worse. These circumstances have pushed some miners to delve into less competitive markets, like artificial intelligence, to make use of their existing infrastructure more aptly.
The situation seems to be less intense as July has come to an end, experts suggest. According to a Bitfinex Alpha report from last week, Bitcoin miners have found their way back to profitability for the first time since the halving. This improvement appears to have stemmed from the adoption of newer, more efficient mining equipment, which has enlarged 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.
Future Outlook
The current economic dynamics and regulatory developments, like President Donald Trump’s proposals for Bitcoin to be a national reserve asset, are viewed as bullish for the mining industry. Marathon Digital Holdings, for example, allegedly added $100 million worth of Bitcoin to its reserves in late July.
Riot, another top Bitcoin miner, has not sold any Bitcoin since January, and CleanSpark has only sold small amounts of its holdings. Handika from Loka Mining forecasted that miners will continue to accumulate Bitcoin, anticipating “limited selling pressure” near Bitcoin’s next all-time high.
Hargreaves from Elastos reportedly said that selling pressure could surface 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. Stay updated with crypto news with TNYR.
