For a long time, bitcoin miners have been holding on to the spoils of their activities. It was then that the profitability of cryptocurrency mining was still high. Due to high cash flow, these miners could afford to retain a good portion of their rewards while still being able to carry out their operations. However, recent market trends have plunged the profitability of bitcoin mining, prompting miners to start dipping into their BTC stash and selling to keep operations alive.
Bitcoin miners are selling
A good number of bitcoin miners had held on to sizable bourses mainly through the bear market. With the market turning and Bitcoin now trading below $29,000, it has become more difficult for miners to hold these coins without compromising their ability to fund their operations. The result of this has been a number of prominent bitcoin mining companies that have said they have sold or will sell some of the BTC they hold.
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Marathon Digital is certainly one of the first names that pops up when the topic of bitcoin mining comes up. The company has been able to consolidate its position as one of the main competitors in the mining world and has attracted a large number of investors, but not even the big companies have been able to escape the onslaught of the market.
Last month, the firm had announced during an earnings call that it may have to sell some of its bitcoin holdings. Marathon Digital owns over 9,600 BTC, most of which he has held for almost two years. However, it seems that doomsday is fast approaching and even the big companies will have to shed some of their BTC.
BTC continues to struggle as sell-offs intensify | Source: BTCUSD on TradingView.com
Companies that have already sold some of their BTC include Riot and Cathedra Bitcoin. Riot had reportedly sold around $10 million worth of Bitcoin in April, bringing the total to 250 BTC. More recently, Cathedra Bitcoin announced that it sold 235 BTC at an average price of $29,152. It came out to a little over $8.7 million. The company explained in its report that this was to help it insulate itself “from further declines in the price of bitcoin and maintain its liquidity position.”
Is mining no longer profitable?
Bitcoin mining is still profitable, but with the price more than 50% below its all-time high, profitability has dropped by a significant margin. A Bitcoinist report highlighted the profitability of BTC miners. Miners are now returning 50% less cash flow than when BTC was trading at $69,000.
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In addition, the daily income of the miners is still low. It had grown 4.50% last week to reach its value of $26,706,581, but remains low. It is the result of the average transaction value and daily transactions decreasing during the last week.
Faith in bitcoin mining stocks is also on the decline. So now, miners are being forced to sell some of their BTC holdings in order to keep their operations going.
Featured image from Outlook India, chart from TradingView.com
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