Bitcoin Miners Are Starting to Dump Their Coins

Bitcoin miners are starting to dump their coin reserves following almost two months of strained revenue in the aftermath of the network’s fourth ‘halving’ event.

In a Wednesday report, crypto market intelligence firm CryptoQuant said miners have been sending their BTC to exchanges in droves, reaching a two-month high of 3,000 BTC—worth approximately $207 million—on June 9.

What followed was a 3% correction in Bitcoin’s price down to $66,000 on Tuesday, although the asset recovered fairly quickly this morning.

“Miner selling via [over-the-counter] desks has also spiked to the largest daily volume since late March,” the report added. On Monday, miners sold 1,200 BTC for about $83 million over the counter.

It was their largest daily selling volume since a 1,600 BTC sell-off day in late March.

CryptoQuant’s figures are based on transactions from Bitcoin mining pools, in which most of significant mining firms participate to keep their revenues more consistent.

Some of these sales have likely been motivated by Bitcoin’s slow upward climb since April, motivating mining firms to take profits while they can.

However, the difficulty for miners to do business has also become undeniable. With the fixed BTC block reward dropping by 50% to 3.125 BTC in April, and network fees staying relatively low, the industry has faced a seismic loss of revenue to which it is still adjusting.

While experts have claimed that large competitors with efficient economies of scale will be able to manage the transition, even some publicly traded miners are starting to sell. For example, the report notes, Marathon Digital (MARA) sold 1400 BTC in June so far, representing 8% of their total reserves prior to the sale, and up from 390 BTC throughout all of May.

Due to the halving, CryptoQuant’s data showed that Bitcoin miners were “extremely underpaid” in May, and have only returned to being “fairly paid” in June.

“We calculate miner overpaid and underpaid by comparing the 30-day percentage change of the U.S. dollar value of the block reward to the 30-day percentage change in mining difficulty,” wrote CryptoQuant in a message to Decrypt. “Right now they are underpaid because the block reward has fallen more than difficulty.”

Since the halving, Bitcoin’s total hash rate has only declined by 4%, meaning it remains almost as difficult and costly to mine a Bitcoin block despite the decreased rewards.

Despite the performance, many mining stocks have performed well since the halving, with Valkyrie Bitcoin Miner ETF (WGMI) rising 33% since that time.