Bitcoin miner reserves have now dipped to 1.90 million BTC, representing the lowest level in over 14 years. This decline is the most significant since February 2010 and reflects a pattern of miners holding less Bitcoin on their balance sheets.
Despite the drop in Bitcoin reserves, the fiat value of these holdings remains near an all-time high, hovering around $135 billion.
The data from IntoTheBlock shows that the miner reserves have decreased from 1.95 million BTC at the beginning of the year to 1.90 million BTC by mid-June. This reduction is linked to the Bitcoin halving event on April 20, 2024, which cut mining rewards from 6.25 BTC to 3.125 BTC.
Lucas Outumuro, head of research at IntoTheBlock, explained that the halving event occurs approximately every four years and has a significant impact on miners’ operations by reducing their Bitcoin rewards. However, he noted that the rate of reserve reduction has historically been slow, thus minimizing major selling pressure on the market.
Despite the decrease in Bitcoin reserves, their dollar value has remained high due to the increase in Bitcoin’s price. Sascha Grumbach, CEO of Green Mining DAO, highlighted how miners have adapted to these changes. While the amount of Bitcoin held by miners has decreased, the market capitalization of US-listed Bitcoin mining companies has surged, reaching an all-time high of $22.8 billion as of June 15, 2024.
Glassnode’s analysis revealed a steady decrease in Bitcoin miner balances over recent weeks, with reserves now at approximately 1.8 million BTC. This ongoing sell-off indicates a shift in miner strategy towards maintaining financial stability rather than the long-term accumulation of Bitcoin.
Bitcoin miners are currently facing an extended sell-off period not seen since 2017, according to on-chain data analyzed by CryptoSlate’s lead analyst, James Van Stratten. The Bitcoin market is 33 days into a miner capitulation, which typically lasts about 41 days on average. Miner capitulation occurs when Bitcoin miners are forced to shut down their machines or sell their BTC to remain operational, indicating unprofitable business conditions.
The primary challenge to miner profits is April’s Bitcoin halving, which cut the block subsidy from 6.25 BTC to 3.125 BTC per block. Since April 19, the average daily revenue for miners has dropped from approximately 900 BTC to 450 BTC. Network fees, though a source of revenue, remain minimal.
Mining has become highly competitive, with only the most efficient operations maintaining profitability. Despite expectations that large, publicly traded mining firms would endure post-halving, on-chain data indicates that even these industry leaders are selling their coins as profit margins narrow.
CryptoQuant reported last Wednesday that miners sold 1,200 BTC in over-the-counter (OTC) trades, primarily initiated by Marathon Digital, the largest publicly traded miner.
On June 18, Bitcoin’s price dropped by 2%, reaching approximately $65,152, and today it remains under pressure around $65,100, hitting an intraday low of $64,700. However, the initial support level, marked by the short-moving average of around $66,000, has become a resistance level. As of this writing, Bitcoin is trading at around $65,660, but it has been unable to break through this new resistance.
