In the depths of the freezing crypto season, bitcoin miners dump their holdings.

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Bitcoin miners have had to take money out of their cryptocurrency stashes because they are losing money because prices are going down, energy costs are going up, and there is more competition.

Researchers at MacroHive have seen a steady rise in the number of coins miners send to cryptocurrency exchanges since June 7. This suggests that “miners have been selling more of their currencies on exchanges.”

As the price of bitcoins fell by 46% in May, several bitcoin miners whose shares were traded on the stock market sold more than 100% of their total output.

“These miners had to increase their selling rate to more than 100% of their output in May due to the mining industry’s declining profitability.” “Since the situation has gotten worse in June, it is likely that they are selling even more,” said Jaran Mellerud, an arcane analyst.

CoinMetrics says that there are currently 800,000 bitcoins in the hands of bitcoin miners. Bitcoin miners run networks of computers to confirm transactions on the blockchain and earn tokens.

As bitcoin’s value more than doubled in 2021, the cryptocurrency mining industry grew quickly, but this expansion has put additional pressure on margins because the mining process is meant to become more challenging as the number of miners rises.

“While the price of bitcoin has decreased over the previous six months, the hash rate and mining difficulty have risen.” Both of these work to reduce margins, therefore they are detrimental to current miners, “Joe Burnett, an analyst at Blockware Solutions, a bitcoin mining company, stated.

According to the Cambridge Bitcoin Electricity Consumption Index, miners consume more electricity than the Philippines on average, so high energy prices are also hurting them.

Chris Brendler, a senior research analyst at D.A. Davidson, stated, “At this point if you’re not in a very low-cost electricity area, you’ve got to shut down.”

Companies that announced sales include Bitfarms, Riot Blockchain, and Core Scientific. The CEO of Bitfarms said that the company “no longer HODLs daily bitcoin output.”

The Valkyrie Bitcoin Miners ETF fell 59 percent this quarter compared to bitcoin’s decrease of 53 percent, which shows how much worse off publicly-traded miners’ shares have been than bitcoin.

In order to finance operations and make payments on pricey mining equipment, several miners, notably Bitfarms, are negotiating financing deals with the money they have earned.

According to Brendler, miners are in need of financing since they don’t want to miss the last payments if they have already paid two-thirds or even 70% of the cost of these expensive machines.

Does the end of the tunnel have a light?

Miners are already having trouble because they use older machines that use more energy and don’t have the same financial stability or access to capital as those who are publicly traded.

According to Glassnode data, Bitcoin’s mining difficulty was reduced by 2.35 percent this week, indicating the network had adjusted after some miners shut off their equipment.

This relieves some of the pressure on those who are still trying.

“It is a zero-sum game to mine bitcoins. You get a bigger piece of the pie if you can keep going when others can’t, “said Charlie Schumacher, a representative for Marathon Digital Holdings Inc., the largest publicly traded miner.

He added that since October 2020, Marathon has stopped selling bitcoin.

Burnett also said that Bitcoin bottoming out after miners gave up “may be a sign that miners who can make it through this capitulation can see a light at the end of the tunnel.”

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