Falling crypto prices – Why miners are dumping their bitcoins like never before

More than 100% – Analysts are closely watching the reactions of miners since the price of Bitcoin (BTC) returned to $20,000. Recent figures give the temperature in the area.

More bitcoins sold than mined

According to data from Arcane Research, the total amount of Bitcoin that listed mining companies sold in May 2022, exceeded the number of bitcoins mined during the month.

Normally, however, these monthly sales represent only 20 to 40% of the bitcoins mined during the month.

Monthly BTC sales of listed mining companies – Source: Arcane Research

These figures reflect the difficulties encountered by players in the sector. Mining companies are now forced to sell a lot more bitcoins, to finance the continuity of their operations in the actual context.

Other talking numbers from Blockchain.com on block revenue from miners illustrate quite well the situation of the sector.

Those revenues were around $50 million in early 2022. They then dipped below $40 million in early May. They even came down up to $16 million in June, when the cryptosphere worried about the fate of Three Arrows Capital and Celsius.

These bitcoin sales which aim to support the operation of mining companies in bear marketcould however have the opposite effect and create a vicious circle.

For Jaran Mellerud, an analyst at Arcane Research, a forced liquidation of a significant part of the assets of miners, would further increase the downside pressure on the Bitcoin price.

And a bigger fall in the price of cryptocurrency obviously does not help the affairs of most crypto companies.

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Bitcoin Miners Surrender: Are We There?

Zack Voell, an analyst at mining software provider Braiin, instead tried to reassure the markets in his June 20, 2022 tweet.

He pointed out to this effect that the miners held 2.59 million BTC. This figure would be down 0.61% compared to the balance of minors on 1er January 2022. So miners generally continue to HOD their bitcoins.

In addition to this data, another statistic also shades the real significance of this bitcoin liquidation from publicly traded mining companies. These latter do not represent than 20% of the network hash rate.

Although these companies have therefore sold an abnormally high amount of bitcoins, a widespread liquidation has not yet taken place.

This absence of liquidation for the whole sector incidentally converges with some data that shows that recent declines in the price of Bitcoin are still relatively small, referring to previous bear markets.

In other words, this liquidation coming, if it takes placecould – in the conditional – be the missing ingredient for Bitcoin to finally hit the final price floor of this cycle.

Mining companies are therefore liquidating their bitcoins, but the situation is far from catastrophic. If the Bitcoin price returns to levels well below $20,000, however, miners could be forced to unplug their machines.

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