For the first time in three months, the 13 largest publicly traded crypto mining companies sold more Bitcoins (BTC) than they produced.
According to Bitcoin mining research platform TheMinerMag, the liquidation-to-production ratio for miners such as Marathon Digital, Core Scientific, Argo Blockchain, Bitfarms, Bit Digital, Hut 8, Iris Energy and Terawulf was 105% in October, meaning that they have sold all of their mined coins plus assets from their holdings.
Miners sold more BTC than were mined in October
In October, Bitcoin’s 28 percent rally to around $35,000 took the leading digital asset to an 18-month high. The liquidation amount of the 13 largest public mining companies contributed to BTC’s monthly gain of 30%, as the companies sold 5,492 BTC – worth around $164 million.
The liquidation-to-production ratio was higher in October than in July, August and September, where it was 64%, 77% and 77%, respectively. The ratio peaked when the bear market began to take its toll in June 2022, rising to 360% before plummeting to around 80% in August of that year.
Notably, some mining companies have consistently sold all of their mined BTC each month, but firms like Marathon, Hut 8, Cipher, CleanSpark, and Bit Digital use a hybrid treasury strategy and liquidated more in October than in previous months. Bit Digital and Hut 8, which sold 422 and 365 BTC respectively, had the highest individual quotas and liquidated over 300% of their monthly production.
Preparing for the upcoming Bitcoin halving
Bitcoin miners may sell more of their mined assets for several reasons, including to replenish their cash reserves or make profits from price increases. Another important reason is to stockpile cash in preparation for the upcoming Bitcoin halving, which would cut its block rewards by half.
Bitcoin halving occurs approximately every four years, or every 210,000 blocks, and continues in the same manner until all 21 million BTC have been mined.
The mechanism controls the issuance of new BTC by reducing the number of coins mined per day. The last halving in May 2020 saw the network’s block reward reduced from 12.5 BTC to 6.25 BTC, and the next halving scheduled for April 2024 will see a reduction to 3,125 BTC.
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