Public bitcoin miners in better financial shape despite a 12.1% year-over-year decline in BTC holdings

Glassnode data analyzed by CryptoSlate shows that year-to-date, Bitcoin miners are starting to take some respite after the troubles of 2022.

Bitcoin miner inventories are down 12.1% year over year

As of January 2022, Bitcoin miners held 36,003 BTC, with mining companies such as Core Scientific, Riot, Hut8, Marathon, and Bitfarms holding over 30,000 coins.

However, the landscape appears to have changed in the year to date as Hut 8, Marathon and Riot are now the dominant miners, holding 87% – 27,760 BTC – of miners’ BTC holdings, according to CryptoSlate research.

Bitfarms and Core Scientific collapsed as they struggled in 2022 – the latter filing for bankruptcy while the former dealt with debt obligations.

Source: CryptoSlate

Meanwhile, in January 2023, the market has seen a small BTC payout from miners compared to a year ago.

Also, shares of several miners are up in triple digits year-to-date (YTD). Miners like Hut8, Riot, Iris, Marathon, etc. have all seen their shares surge over 100% YTD.

Miners are selling their BTC on exchanges at ‘extremely low levels’

CryptoSlate analysis showed that miners appear to be in a healthier position compared to last year.

According to Glassnode data analyzed by CryptoSlate, miners are selling their BTC to exchanges at extremely low levels compared to previous years.

Source: Glassnode

This is because the mining industry’s profitability is gradually returning as the price of BTC has surged around 50% in 2023 – the digital flagship briefly traded above $25,000 on Feb. 16 for the first time since August 2022.

Meanwhile, Bitcoin’s hash rate rose 34% year-on-year to hit a new all-time high of 300 TH/s. This shows the current consistency and strength of the network.

BTC mining is currently cheaper

The Difficulty Regression Model, a metric used to measure the cost of mining Bitcoin, is currently below the asset’s spot price.

Source: Glassnode

As per the chart above, the DRM sits at $20,000, more than $4,000 below BTC’s current spot price at the time of writing.

The current DRM level is essential for miners as it ensures they are in an excellent financial position even as hash rates continue to rise and mining difficulties increase.

Meanwhile, the DRM could also be used to gauge bear market sentiment if the price of BTC falls below the DRM.

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