Are The Big Bitcoin Miners Preparing to Empty Their Bags? 

A Bitcoin selloff may be looming as miners are facing increasing pressure due to a sharp decline in revenue following the April 20 halving which slashed block rewards from 6.25 BTC to 3.125 BTC.

On May 13, crypto research firm Kaiko revealed that the recent halving cut the daily production from 900 to 450 BTC, resulting in around $10 billion in revenue loss per year based on the prices at the time.

Miner Selloff Imminent?

Miners were initially able to keep revenue streams buoyed by high transaction fees from the meme coin frenzy and Bitcoin Runes launch however, activity has dwindled on both fronts since.

Two of the largest public Bitcoin mining companies, Marathon and Riot, hold 17,631 BTC worth just over $1.1 billion and 8,872 BTC worth over $500 million, respectively, according to Kaiko.

Transaction fees accounted for 16% of BTC earned by Marathon Digital in April, up from 4.5% in March, it noted before adding “the recent decline in fees could lead to selling pressure from miners.”

“If miners were forced to sell even a fraction of their holdings over the coming month this would have a negative impact on markets.”

“Trading activity typically slows down, and liquidity dries up over the summer months,” it added.

Could $BTC miners become forced sellers as fees fall?

Higher transaction fees offset lower miner rewards for firms in April, but this has since reversed.

Check out our latest debrief for the full trend:https://t.co/mvlZi2k0sv

— Kaiko (@KaikoData) May 13, 2024

The report reads that Bitcoin miners sold most of their reserves amid the crypto meltdown in 2022.

However, they have been holding more over the last two years with a sharp rebound in asset prices which have gained 350% from a cycle low of $16,500 in December 2022 to peak at more than $73,500 in March.

Major miners such as Marathon have missed revenue expectations as a result of this and other factors.

Hash Price Woes

Profitability, or hash price, has slumped in recent weeks and is currently $0.050 terra hashes per second per day, according to HashRateIndex. This is down 72% from the $0.182 TH/s/day it reached around the time of the halving.

The average network hash rate also hit a peak of around 650 EH/s in late April, further compounding miner woes as competition for the next block reward intensifies.

This has been measured in network difficulty, which is also near peak levels of 83.15 T, though it did fall from its record high of 88 T on May 9.