Crypto News- Bitcoin miners are feeling increasing pressure to sell some of their BTC holdings, potentially causing prices to decline. This situation coincides with all-time high hash rates and persistently high energy costs.
Bitcoin Miners Face Growing Selling Pressure Amidst Record Hash Rate
Miners are actively moving BTC to centralized exchanges, likely to cover rising operational expenses.
On September 28, crypto analyst Miles Deutscher highlighted a significant challenge in the supply dynamics of Bitcoin: miners are grappling with growing selling pressure.
The combination of peak hash rates, rising network difficulty, and surging energy prices has collectively squeezed mining profitability. Deutscher noted that “with rewards set to be halved due to the upcoming halving event, miners may find themselves compelled to sell assets to strengthen their capital positions.”
This trend is evident as Glassnode reports record quantities of Bitcoin flowing from miner wallets to exchanges. Just last week, the total hash rate hit an all-time high of 425 EH/s (exahashes per second) according to Blockchain.com, marking a remarkable 68% increase since the year’s beginning.
Concurrently, network difficulty has reached a record high of 57T, reflecting a 63% increase this year. These factors have heightened competition and reduced the overall profitability of Bitcoin mining. The hash price, measured at $0.06 per terahash per second per day according to the Hashrate Index, has plummeted by 85% since the peak of the bull market at $0.40/TH/s/day.
Despite some relief from on-chain metrics, miners continue to feel the need to sell their holdings to sustain their operations. Glassnode has cautioned that miners may be on the brink of financial strain unless BTC prices experience a near-term surge.
Depressed BTC prices exacerbate miners’ challenges, with the cryptocurrency failing to breach the $30,000 resistance level three times this year and frequently retreating to the $26,000 range.
Nevertheless, there is a positive aspect to consider: Bitcoin’s improving environmental, social, and governance (ESG) qualities. This improvement is being driven by the growing use of renewable energy in mining operations.
On September 26, mainstream media reported on a KPMG study highlighting Bitcoin’s potential contributions to global ESG frameworks, enhancing the cryptocurrency’s perception in mainstream finance.
Bitcoin’s shift toward renewable energy and recent research findings are addressing concerns about its environmental impact. However, for miners facing imletişte financial pressures, these developments provide little relief as they contemplate selling a portion of their holdings.
Leave a comment