Leer en Español
The latest data from blockchain analytics CryptoQuant show that bitcoin miners are liquidating their positions quickly and converting their profits to dollars.
Around 14,000 bitcoins, or just over $300 million at the current price, were transferred out of miners’ wallets in less than 24 hours last week. This represents the largest sale of bitcoin by miners since January 2021.
This phenomenon is known as miner capitulation, and it means that miners are preparing to sell their mined bitcoin to cover their operating costs, which they have to pay in dollars.
Bitcoin is hovering around $21,000 at present. Although the cryptocurrency continues to be the most valuable digital asset on the market, it has lost almost 70% of its value since November 2021, when it was trading above $69,000.
Energy costs heavily impacted by the Ukraine crisis have affected the profitability of mining operations that now have to contend with soaring energy prices worldwide.
Lower bitcoin prices and higher energy costs are crushing miners’ profits, forcing them to sell part of their crypto savings despite the current market volatility.
High energy costs mainly affect small miners, not having a source of electricity generation they are more impacted by the rise in the price per kilowatt and the decrease in the price of bitcoin.
Larger miners, who even have power plants to power their bitcoin mining, are less affected than small miners, as they can at least partially shield themselves from volatility. The exit of the small miners, represents good news for the larger miners, as it means less competition and greater rewards from the bitcoin mining pool.
Economist, writer and liberal. With a focus on finance, the war on drugs, history, and geopolitics // Economista, escritor y liberal. Con enfoque en finanzas, guerra contra las drogas, historia y geopolítica