For the longest time, bitcoin miners have captured the spoils of their activities. That was when the profitability of cryptocurrency mining was still high. Due to the high cash flow, these miners can still hold on to a good portion of their rewards while still being able to perform their tasks. However, recent market trends have eroded the profitability of bitcoin mining, forcing major miners to plunge into their BTC stash and sell off to keep operations alive.
selling bitcoin miners
A significant number of bitcoin miners maintained considerable bags mainly through the bear market. With the turn of the market and bitcoin now trading below $29,000, it has become increasingly difficult for miners to hold these coins without compromising their ability to fund their operations. The result is that many major bitcoin mining companies are coming out to say that they have forfeited or sold off some of the BTC they hold.
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Marathon Digital is undoubtedly one of the first names that come up when it comes to the topic of bitcoin mining. The company has managed to solidify its position as a top contender in the mining world and attract a large number of investors, but even the big ones haven’t escaped the onslaught of the market.
Last month, the firm announced during an earnings call that it may have to sell some of its bitcoin holdings. Marathon Digital holds over 9,600 BTC, most of which have been around for almost two years. However, it seems that the day of reckoning is fast approaching and even large companies will need to get rid of 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 reportedly sold around $10 million worth of bitcoin in April for a total of 250 BTC. Recently, Cathedra Bitcoin announced that it sold 235 BTC at an average price of $29,152. It turned out to be a little over $8.7 million. The company explained in its report that this was “to protect itself from additional drops in the price of bitcoin and to help maintain its liquidity position.”
Mining is no longer profitable?
Bitcoin mining remains profitable, but has declined by a significant margin, with the price trading more than 50% from its all-time high. A report by Bitcoinist highlights 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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Additionally, daily miner revenue is still low. It rose 4.50% to its $26,706,581 price last week, but it is still low. This is a result of the drop in average transaction value and daily transactions over the past week.
Confidence in bitcoin mining stocks is also falling. So now, miners are forced to sell some of their BTC holdings in order to be able to continue their operations.
Featured image from Outlook India, chart from TradingView.com
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