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Bitcoin Miners Always Sell Into Halvings, Is This Time Any Different?

On-chain data shows Bitcoin miners have always sold as Halvings have occurred. With the next one just around the corner, how are miners behaving this time?

Next Bitcoin Halving Is Less Than Two Days Away Now

In a CryptoQuant Quicktake post, an analyst discussed Bitcoin miners’ behavior in the build-up to the next Halving.

The “Halving” is a periodic event on the Bitcoin network where the cryptocurrency’s block rewards (the compensation miners receive for solving blocks) are permanently slashed in half.

This event occurs approximately every four years, and according to NiceHash’s countdown, the next one will occur in just over 32 hours.

Bitcoin Halving

Bitcoin miners earn revenue from two sources: transaction fees and block rewards. Historically, the former has been quite low on the BTC network, so the miners primarily depend on the latter to pay off their running costs.

Since the block rewards are cut in half during Halvings, these events naturally deal a significant blow to the miner’s revenues. As such, it’s not surprising that the miners have generally shown a reaction to the event in the past cycles.

“One of the common dynamics that occur in every cycle of cutting the issuance of new BTC is the significant selling pressure exerted by miners,” says the quant. One way to gauge the degree of selling pressure coming from these chain validators is via the Miner to Exchange Flow metric.

This indicator tracks the total amount of Bitcoin moving from miner-associated addresses to wallets connected to centralized exchanges. As miners usually deposit Bitcoin to these platforms for selling, this flow can provide hints about their selling behavior.

Now, here is a chart that shows the trend in the 30-day moving average (MA) BTC Miner to Exchange Flow over the last few years:

Bitcoin Miner to Exchange Flow

As displayed in the above graph, the 30-day MA Bitcoin Miner to Exchange Flow had surged to high levels in the 2020 Halving event, implying that this group had potentially been participating in a selloff.

This selling push may have come from the miners planning to exit, given the sharp revenue reduction that was set to occur. The graph, though, clearly shows that no such selling pressure has emerged this time around despite the event being just around the corner.

So, what’s going on here? The analyst suggests that the Bitcoin miners may have already completed the latest round of selling in advance (as the exchange inflows from the cohort did spike in February). If this is true, the quant thinks this could benefit the market in the short term.

BTC Price

Bitcoin has continued to move sideways inside a range recently, as its price is still trading around $63,500.

Bitcoin Price Chart

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Bitcoin Miners To Lose A Whopping $10 Billion Following The Halving – Here’s Why

The Bitcoin Halving is set to take place this week. Miners’ rewards will be cut in half from 6.25 BTC to 3.125. This event is expected to have far-reaching effects on the miners themselves, as they are bound to lose a significant amount of revenue once the halving occurs.

Bitcoin Miners Could Lose Up To $10 Billion In Revenue

According to a Bloomberg report, Bitcoin miners could lose up to $10 billion annually following the Bitcoin Halving. This is because these miners, who currently earn 900 BTC daily from validating transactions, would see their income drop to 450 BTC once the halving happens. However, it is worth noting that this projected revenue loss is based on Bitcoin’s current price.

Therefore, this revenue loss can be cushioned if Bitcoin’s price experiences a significant surge after the halving. These miners will, however, have in mind that reliance on Bitcoin’s price rise isn’t sustainable, considering that they will also encounter subsequent bear markets, which would lead to a price decline for the flagship crypto. 

That is why miners like Marathon Digital and CleanSpark are reported to have invested in new equipment and have sought to weed out the competition by buying out their smaller rivals. Buying out the competition can reduce the number of miners competing for block rewards and cushion the drop in their daily revenue. 

Bitcoinist also previously reported that Bitcoin miners were looking to diversify their operations in a bid to boost their revenue streams and earn additional income that could cushion the effects of the halving. The artificial intelligence (AI) sector is one of those areas in which these miners are actively seeking opportunities, considering that Bitcoin mining’s infrastructure is well suited for certain AI operations. 

BTC Miners Facing Competition From Tech Giants

Bloomberg also reported that US Bitcoin miners are facing competition from the largest tech companies in the world for electricity to power their operations. These tech giants, who also happen to be high-energy consumers, are looking for as much energy as Bitcoin miners to power their data centers. 

The report further noted that electricity constraints in the US, alongside the high demand for electricity among miners and tech giants, have led to a surge in electricity rates. This development is also making it harder for Bitcoin miners to run their operations smoothly in the country. 

Tech companies are said to have an edge over them when acquiring power from utility companies due to their consistent revenue streams, unlike Bitcoin miners, whose success largely depends on Bitcon’s volatile price.  

Bitcoin price chart from Tradingview.com

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Bitcoin Demands Exceeds Miner Supply By 1,300%, Why A Push To $237,000 Is Possible

As the Bitcoin Halving draws nearer, there is so much optimism about what could happen to Bitcoin’s price in the aftermath of this event. This optimism is further heightened by a recent development showing how Bitcoin’s demand far outpaces its supply, which could see the flagship crypto token rise to as high as $237,000. 

Bitcoin Demand Significantly Outpacing Its Demand

Crypto analyst Willy Woo mentioned in an X (formerly Twitter) post that the Bitcoin network receives an average of $607 million of new investor demand daily. On the other hand, this demand is said to be met by a supply of just $46 million daily in terms of Bitcoin mined. This development is more significant considering that the Halving is fast approaching. 

This is when Bitcoin Miners’ rewards are cut in half, acting as a deflationary measure and reducing the rate at which more BTC comes into circulation. This also offers a bullish narrative, as the already insufficient supply will decline further after the Halving event. Once that happens, Bitcoin is expected to become more valuable, with more price increases imminent. 

Industry expert Anthony Pompliano also highlighted this phenomenon when he noted how institutional investors were gobbling up BTC almost 13x faster than its production rate. He added that the flagship crypto token was bound to see a new all-time high (ATH) if this trend continues. 

This institutional demand for BTC is mainly driven by the Spot Bitcoin ETFs, which were approved in January. Due to the impressive demand for these funds, fund issuers like BlackRock have continued to accumulate a significant portion of the BTC supply on a daily. Interestingly, these Bitcoin ETFs were reported to hold 3.3% of Bitcoin’s circulating supply earlier in the month. 

Bitcoin’s Road To $237,000

In response to Willy Woo’s post, crypto analyst MacronautBTC made a “conservative” calculation of how Bitcoin’s price could rise to $237,000. Using a multiplier of 3x the Dollar currently flowing into the Bitcoin ecosystem, the analyst mentioned that Bitcoin could see an added market cap of 4.38 trillion. 

He then added the 4.38 trillion to Bitcoin’s current market cap of 1 trillion, which sums up to a 5.38 trillion market cap. This potentially puts Bitcoin’s price at $273,000 (a year from now, going by MacronautBTC’s calculation. 

The analyst also highlighted how this price level coincides with predictions made by notable Bitcoin bulls. One of them is Tim Draper, who recently stated that BTC will hit $250,000 in 2025. 

At the time of writing, Bitcoin is trading at around $50,900, down almost 2%% in the last 24 hours, according to data from CoinMarketCap. 

Bitcoin price chart from Tradingview.com

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Bitcoin Miner Reserves Drop To June 2021 Levels, What This Means For Price

Bitcoin miner reserves can often be a tell for where the market could be headed next due to their large holdings. These reserves going up or down can pinpoint how miners are looking at the market, and a drop in their reserves can be bad for the BTC price.

Miners Reserves Drop By 14,000 BTC

Bitcoin miners, who are responsible for confirming transactions on the blockchain and keeping the network safe, seem to be turning toward selling rather than accumulating. According to a CryptoQuant report, these miner reserves have seen a notable drop since 2024 began.

Their holdings dropped by 14,000 BTC in less than two months, suggesting that these miners have been selling some of their stash. Going by an average price of $43,000 since January 2024, this means that Bitcoin miners have sold over $600 million worth of BTC so far. As a result of this, miner reserves are currently sitting at 1.8 million BTC, which is the lowest level since June 2021.

Bitcoin miners selling their coins are not new because they often need to sometimes sell to keep their operations running. The most notable costs include electricity, as well as mining machines. However, it does not change the fact that their selling can have an adverse effect on the price of BTC.

This time around, though, miners seem to be selling for an additional reason, which Matthew Sigel, who’s head of digital asset research at VanEck, has identified to be for purposes of bolstering their balance sheets.

Bitcoin Miners Getting Ready For The Halving

The next Bitcoin halving is expected to happen sometime in April 2024, and the block rewards are expected to fall to 3.125 BTC. Naturally, these miners are getting ready for this drop in rewards, as identified by Matthew Sigel.

“Miners have begun to sell more of their coins to bolster balance sheets and fund growth capex ahead of tougher times for margins when block rewards are halved in April. After the halving, scale will matter even more.”

Nevertheless, as selling has ramped up, so has buying as Spot Bitcoin ETF issuers scramble to accumulate BTC for their customers. According to this NewsbTC report, Spot Bitcoin ETF issuers now hold more than 657,000 BTC, worth more than $28 billion at current prices.

At the time of writing, the BTC price is trending at $42,933, after being beaten back from the $43,000 resistance. The crypto’s fluctuations at this level suggest that $43,000 is the target to beat if it is to continue its uptrend.

Bitcoin price chart from Tradingview.com

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Bitcoin Miner Selloff Poses “Negligible Impact”, Quant Argues

On-chain data shows the Bitcoin miners have been selling recently, but this quant has argued that this selloff shouldn’t have much impact on the market.

Bitcoin Miner Reserve Has Registered A Decline Recently

In a CryptoQuant Quicktake post, an analyst discussed the latest selling pressure that the miners have been putting on the market. The indicator of interest here is the “miner reserve,” which keeps track of the total amount of Bitcoin that the miners combined hold in their wallets right now.

This metric can naturally provide information about the collective behavior of these chain validators. Generally, the miners withdraw their coins from their reserve when they want to sell, so a decline in the indicator can potentially have bearish consequences for the asset.

A rise in the metric, on the other hand, may be bullish for the cryptocurrency’s price as it suggests the miners as a whole are in accumulation mode at the moment.

Now, here is a chart that shows the trend in the Bitcoin miner reserve over the past year:

Bitcoin Miner Reserve

As displayed in the above graph, the Bitcoin miner reserve has been on its way down since October, implying that this cohort has withdrawn a net amount of BTC from their wallets during this period.

This latest selloff from the miners has recently been a topic in the community, with many speculating about the possible bearish impact arising from it. The quant has a different opinion on the matter, however.

“The sell-off of Bitcoin reserves by miners, as discussed on X and various portals, is unfounded,” explains the analyst. To back this claim, the quant has pointed out the exact numbers involved here.

Before this selling started, the miner reserve had a value of around 1,84,997 BTC. Following the decline that the indicator has witnessed since then, the miners now hold about 1,833,222 BTC.

This represents a decrease of 12,755 BTC, which, although substantial on its own, doesn’t seem too large in the grand scheme of things, especially considering the size of the miner reserve itself. “The minimal amount of bitcoin sold has negligible impact on the market,” notes the analyst.

Bitcoin Miner Inflows & Outflows

The above chart shows the data for the Bitcoin inflows and outflows being made by the miners. There have indeed been outflows taking place recently, which is why there has been talk of a selloff.

At the same time, the inflow transaction volume has also been at significant levels, making up for these outflows. This is the reason for the relatively small net decrease in the total miner reserve.

BTC Price

Bitcoin had recovered beyond the $43,000 mark earlier, but the asset has seen a setback during the past day as it has slipped back towards $42,500.

Bitcoin Price Chart

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Why Is Bitcoin Price Trading Sideways? 3 Key Factors

The Bitcoin price has been experiencing a phase of stagnation over the past days, leaving investors and analysts searching for the underlying causes. Three key factors can be seen as central to explaining Bitcoin’s current sideways trading trend:

#1 ETF Inflows Are Offset By GBTC Selling, But For How Much Longer?

The spot Bitcoin ETFs continue to be the dominant theme on the market, and Grayscale in particular, with its GBTC, remains the focus of analysts. While the ETF inflows continue to be record-breaking, the Bitcoin price remains flat. One of the main reasons for this is presumably the outflows on GBTC, which is viewed as overpriced with its fee of 1.5% per year (compared to 0.25%) by other issuers.

Thomas Fahrer of Apollo pointed out the significant flow discrepancies in the market: “In three days of trading. IBIT +16K BTC, FBTC +12K BTC, BITB +6.7K BTC, ARKB +5.3K BTC, GBTC -27K BTC. GBTC BTC is flowing but not enough to sustain the other ETFs. Supply shock inbound imo.”

Alessandro Ottaviani provided further insights, stating, “Bitcoin inflow in the ETFs: +47k, Bitcoin outflow from Grayscale: -27k, net inflow: 20k. […] Soon or later I expect Grayscale outflow stopping or reducing significantly. Those who have Grayscale GBTC were already into Bitcoin and therefore I think they already made the decision to sell, the execution of which should happen not so much later than the launch of the ETF.

Bloomberg analysts James Seyffart and Eric Balchunas expect a portion of GBTC outflows to migrate to other Bitcoin exposures, highlighting the complexities of fund accounting and settlement delays in tracking these movements. They noted, “GBTC has crossed $1.1 billion in outflows…We expect a meaningful percentage of those assets to find their way back into Bitcoin exposure, mostly other ETFs.”

#2 Bitcoin Miners Sell

Ali Martinez has spotlighted the intensified selling activity by Bitcoin miners as another factor influencing the current price stagnation. Recent on-chain data indicates that miners have significantly increased their Bitcoin sales.

Martinez commented on X (formerly Twitter), “Bitcoin Miners in Selling Mode: Recent on-chain data from Cryptoquant indicates a substantial increase in selling activity by BTC miners.”

Bitcoin miners selling pressure

Notably, the shift in miner behavior is consistent with historical trends, where miners sell their holdings to manage cash flow or capitalize on price increases during market rallies.

#3 Consolidation Phase Following ETF Mania

The market is currently undergoing a consolidation phase after the euphoria surrounding Bitcoin ETFs, which led to an 82% rally. Such a phase is considered natural and mirrors historical patterns seen in other markets, like the first gold ETF.

Although gold initially recorded an increase of around 6%, it then took a full nine months to start the actual rally, which almost quintupled the price. The same goes for the Bitcoin ETFs. It will take some time before the marketing machine of the asset managers starts up and new institutional investors can be convinced of the new asset class.

Analyst Skew provided a technical perspective, stating, “BTC 4H: Remaining flexible till trend confirmations, however not looking good for the bulls without 4H 200EMA reclaim & RSI below 50. Yearly open [is] still very important for overall risk-reward. Above is good with bullish confirmations. Below is bad for risk & with bearish confirmations leads to downtrend (hedge mode). Pivotal area for 1H – 4H trend ~ $42.5K”

At press time, BTC traded at $42,684.

Bitcoin price

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Bitcoin Sees Massive Sell-Off From Miners, As Price Holds Steady

Amid the excitement encompassing the approval of Bitcoin Spot Exchange-Traded Funds (ETFs), BTC miners have been spotted carrying out an aggressive selling spree leaving the community to ponder on the impact of the sell-off.

Bitcoin Miners Engage In Selling Spree

Well-known cryptocurrency analyst Ali Martinez shared this information with the community on the social media network X (formerly Twitter), noting a “substantial increase in selling activity” from Bitcoin miners lately.

According to data shared by Ali, miners have sold about 10,600 Bitcoin in less than 24 hours. This was valued at an estimated $455.8 million as of the time of the report.

Bitcoin

The recent increase in sales by the Bitcoin miners indicates a responsive market. In addition, the sizable amount involved signifies an impactful development in the cryptocurrency landscape.

Several reasons could be traced back to the massive selling spree by these miners. One potential reason could be attributed to the decline in the Bitcoin hash rate, which generally affects the profitability of miners.

BTC miners must make several guesses at a challenging mathematical problem in order to process transactions. A greater hash rate indicates that the miners are carrying out more guesses, suggesting more effort to secure the network. 

The crypto asset’s hash rate saw a notable decrease of 25% during the last weekend. This raises speculations regarding the security of BTC’s network ahead of the much-awaited “Halving.”

It was reported that the total real-time rate from all mining pools decreased from 570 exahashes per second (EH/s) to as low as 425 EH/s. However, the hash rate is currently sitting at 550 exahashes per second (EH/s).

The reduction occurred due to the restrictions placed on businesses’ use of electricity by ERCOT (Electric Reliability Council of Texas) because of unfavorable cold weather.

Interest In BTC Mining From Institutions

Top financial companies have been demonstrating interest in Bitcoin mining companies for a while now. Various financial institutions have made significant investments, which have also helped the mining industries. 

Even those who have historically opposed Bitcoin or have been hostile to it have invested millions of dollars in the industry throughout 2023.

Since August 2023, Blackrock has been a significant stakeholder in four of the five biggest mining companies. The asset manager increased its level of involvement with these firms only during the second half of last year.

As of the time of writing, Bitcoin was trading at $42,710, indicating an over 7% decrease in the past seven days. Its market cap is up slightly by 0.02% in the past 24 hours, while its trading volume is down by 17.17%.

Bitcoin

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Bitcoin Erases Recovery As Miners Cash Out 3,000 BTC

On-chain data shows the Bitcoin miners have participated in a 3,000 BTC selloff recently, something that may explain the asset’s latest pullback.

Bitcoin Miner Reserve Has Taken A Plunge Recently

As pointed out by analyst Ali in a new post on X, the BTC miners have participated in some selling recently. The indicator of interest here is the “miner reserve,” which keeps track of the total amount of Bitcoin sitting in the wallets of all miners.

When the value of this metric goes up, it means that the miners are receiving a net number of coins in their addresses right now. Such a trend suggests that these chain validators are choosing to accumulate the asset currently, which can naturally have bullish effects on the price.

On the other hand, a decline implies that this cohort is transferring coins out of their wallets at the moment. Generally, the miners make such outflows when they are looking to sell their BTC, so this kind of trend can have bearish implications for the cryptocurrency.

Now, here is a chart that shows the trend in the Bitcoin miner reserve over the past month:

Bitcoin Miner Reserve

As displayed in the above graph, the Bitcoin miner reserve has registered a sharp drop during the past couple of days. During this withdrawal spree, these chain validators transferred out more than 3,000 BTC from their wallets, worth around $128 million at the current exchange rate.

Bitcoin had recovered to the $43,800 level earlier after news had come out about Microstrategy completing another substantial purchase. As the miners made these outflows, though, the cryptocurrency witnessed a drawdown towards the $42,000 mark.

Given the timing, it would appear possible that the miners had made these transfers to cash in on the recovery and this extra selling pressure may have contributed to the decline that the asset ended up seeing.

Miners are a group that has to pay constant operating costs in the form of electricity bills, so they regularly sell some of the BTC they mine and earn from transaction fees in order to cover these expenses.

More often not, though, the miners only participate in relatively low levels of selling, which is readily absorbed by the market and the cryptocurrency doesn’t feel too much impact

This time around, though, these chain validators have sold a sizeable amount inside a narrow window, which is potentially why Bitcoin has appeared to have been affected.

In some other news, the market intelligence platform IntoTheBlock has revealed the average holding time on the Bitcoin blockchain and how it compares against other networks.

Bitcoin Holding Time

As is visible above, Bitcoin holders carry their coins for 4.3 years on average, which is far greater than what Cardano (ADA) and Avalanche (AVAX) blockchains observe.

While miners don’t tend to HODL because of their running costs, it would appear that the normal investors on the BTC network are more than making up for it by holding for very extended periods.

BTC Price

The market doesn’t seem to be too discouraged after the drop due to the selling pressure from the miners, as Bitcoin is now once again making a recovery push. So far, BTC has climbed back to the $42,900 level.

Bitcoin Price Chart

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Bitcoin Miner Revenue Sees Massive 6-Month Crash – What’s Going On?

Despite Bitcoin being up over 100% year-to-date (YTD), a recent report shows that this hasn’t necessarily translated to profits for the network’s miners. Instead, these miners seem to be experiencing a downturn in their revenue even as the Bitcoin Halving looms. 

Bitcoin Miners’ Revenue Down By Over 30%

According to a report by BanklessTimes, the revenue of these miners is down by over 30% in the past six months. Interestingly, these miners had their most profitable month when Bitcoin’s price was just picking up at the beginning of the year. Their revenue soared to as high as $918.8 million in January.

In the months after that, there was a significant decrease in the revenue earned. Things began to pick up again in October, as that month represented their second-highest monthly earnings of 2023. 

They are reported to have earned $885 million in that period. However, the downward trend resurfaced in November as these miners saw a drop in their revenue once again. The total earned in that month stood at $615.1 million. 

Commenting on this data, BanklessTimes crypto expert Alice Leetham noted how this has become a cause for concern. This brought about the need to analyze factors that may be contributing to this downward trend. 

Factors Contributing To The Trend

The volatile nature of Bitcoin prices has been singled out as the most obvious factor affecting miners’ revenue. Bitcoin’s failure to meet certain price projections has directly impacted the profitability of mining projections. 

There is the likelihood that certain miners doubled down on their operations in hopes that the crypto token will hit certain milestones, and that hasn’t happened. 

Bitcoin mining difficulty adjustment is said to be another factor for this downward trend. Mining difficulty becomes higher as more miners enter the network. This ultimately leads to a decrease in miners’ revenue as more persons are competing to mine a block. Bitcoin’s popularity hasn’t helped in this regard, as the network continues to attract an increasing number of miners. 

Meanwhile, there is also the Bitcoin Halving event, which will be playing in the minds of these miners. This is when miners’ rewards are cut in half. The next one is scheduled for April 2024. With this downward trend and the halving on the way, it isn’t surprising that these miners are looking to diversify their operations. 

BanklessTimes, however, believes that things could start looking up once again for these miners. They highlighted the ongoing advancements and increasing acceptance of Bitcoin as factors that might help “counterbalance these difficulties.”

Featured image from Shutterstock

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Solo Bitcoin Miner Snags $200,000 Block Reward, How Did They Do It?

A solo Bitcoin miner has struck gold after successfully claiming a $200,000 block reward. The considerable achievement has captured the attention of fellow miners and crypto enthusiasts, highlighting the potential for lone miners to effectively compete with larger mining operations 

Lone Bitcoin Miner Hits Jackpot

On October 28, a software engineer of Bitcoin CGMiner and an admin of Solo Ckpool, Dr. Con Kolivas congratulated a lone Bitcoin miner in an X (formerly Twitter) post for accomplishing a rare milestone by solving the 278th solo block at Solo Ckpool. 

The lucky miner used 11 PH/s of hash power to discover block 814,308 and claimed a $200,000 (6.25 BTC) block reward.

“Congratulations to miner 3KCykmdpBpNKTtZJAvp3u2N2EQjGzbUF7c with ~11PH for solving the 278th solo block on solo.ckpool,” Dr. Kolivas stated. 

Presently, large-scale mining operations and pools are dominating the Bitcoin mining industry. When blocks are discovered, these mining companies often share the rewards. In contrast, mining pools like Solo Ckpool offer lone miners a higher level of independence allowing them to earn almost all rewards when they discover a block. 

This recent solo mining achievement has not been the only accomplishment this year. In August, a solo Bitcoin miner solved block 803,821, claiming 6.25 BTC worth $160,000. Multiple solo miners have also discovered substantial blocks and reaped significant rewards in the last few months. 

The lure of solo mining pools is growing as many miners are looking to increase their chances of earning large rewards while reclaiming a sense of independence in the competitive Bitcoin mining market. 

BTC Mining Hashrate On The Rise

Bitcoin Hashrate has continued to increase following the recent surge in the value of BTC. Earlier on October 12, the hash rate saw an alarming increase to 456 exahash per second (EH/s). Following this increase, the hash rate stabilized slightly dropping down to 443 EH/s sometime on October 28. 

Despite the increased level of mining difficulties, hash rates are rising. Bitcoin hash rate is slightly back up today to 452.63 EH/s with an estimated difficulty adjustment of 12.78% and network difficulty of 62.46T. The average block time for mining is also approximately 8 minutes and 52 seconds. 

In the past month, mining hash prices fell to significant lows, depicting the possibility of chain validators experiencing higher mining difficulties and pressure. Now, hash rates are on the rise and Bitcoin miners are taking advantage of these opportunities to increase their earnings.

Bitcoin price chart from Tradingview.com

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By The Numbers: Bitcoin Hashrate Poised To Complete 100% Growth In 2023

As analysts continue to debate the future of the flagship cryptocurrency, Bitcoin, the network’s hashrate has seen exponential growth, with this key indicator poised to experience an 100% increase (from the beginning of the year) before the year runs out. 

How Bitcoin’s Hashrate Has Grown

The hashrate, which is used to measure the computational power used to mine and process transactions on the network, currently (at the time of writing) stands at 445 exahashes per second (EH/s). This figure represents a significant increase, considering that the network hashrate stood at 255 EH/s on January 1, 2023. 

Bitcoin hashrate

These figures mean that the network hashrate has grown by 190 EH/s since the year began, and at this rate, it could well hit 510 EH/s by the end of the year, signaling a 100% increase from when the year began. These figures also suggest that more miners have jumped on the Bitcoin blockchain, with it being faster and more secure as a result of this. 

At this rate, the hashrate could also well be on the way to fulfilling some of the predictions made by analysts. In March, A research analyst at River Financial, Sam Wouters, noted the impressive growth rate and predicted that Bitcoin’s hashrate could reach a “Zettahash by the end of 2025.” A Zettahash is equivalent to 1,000 EH/s.

Going by this current rate, some have noted that Wouters’ prediction could become a reality by December 23, 2025, or the beginning of 2026.

Despite this significant growth rate, it is worth mentioning that Bitcoin’s hash price has remained rather tepid during this same period. Hash Price refers to the revenue generated by miners on a per tera-hash basis. 

The hash price currently stands at close to $60, almost the same figure as at the beginning of the beginning of the year. Notably, Miners’ biggest payday came on May 8, 2023, when the hash price was $125. 

Where The Bitcoin Hashrate Is Coming From

In his tweet back in March, Wouters also tried to analyze where the growth in Bitcoin’s hashrate could be coming from. He shared his belief that it was unlikely that the added hashrate was coming from nation-states, as some people may suggest. According to him, the odds of nation-states providing computing power to the network and remaining a secret is low as “there are far too many people involved in running massive operations.”

He concluded by stating that the source of the added hashrate was “nuanced” as it could simply be a result of factors like new models being put on the market, unused inventory going online, more facilities going live, and also entrepreneurs who are finding cheap sources before regulators step in. 

Bitcoin price chart from Tradingview.com (Hashrate mining)

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Bitcoin Plunges To $26,000 As Miners Sell Big

Bitcoin has plunged towards the $26,000 level as on-chain data shows the Bitcoin mines have been participating in a selloff.

Bitcoin Miner To Exchange Flow Has Spiked During The Past Day

As pointed out by an analyst in a CryptoQuant post, the miners have been showing signs of selling recently. The relevant indicator here is the “miner to exchange flow,” which keeps track of the total amount of Bitcoin that miners are depositing to exchanges.

Generally, these chain validators only make such transactions when they intend to sell, so the indicator’s value observing a spike can be a sign of a selloff.

The below chart shows the trend in the 7-day moving average (MA) BTC miner to exchange flow over the past couple of weeks:

Bitcoin Miner To Exchange Flow

As displayed in the graph, the 7-day MA Bitcoin miner to exchange flow has seen a huge spike during the past day. The quant has also highlighted the previous instances of high values of the indicator that occurred in the past two weeks.

It would appear that the BTC price has generally registered a drawdown whenever the miners make large deposits to these platforms. With the latest spike in the metric, too, the cryptocurrency has taken a plunge, as its price has now returned back to the $26,000 level, completely erasing the recovery that the Grayscale rally had brought.

It’s never a certainty that the deposits that these holders are making are indeed for selling, but given the timing of the price drawdown, it would appear likely that the miners were looking to sell after all.

In the chart, the analyst has also attached the data for a few more metrics. First, there are the “miner inflow” and “miner outflow” indicators, which, as their name suggests, measure the amount of Bitcoin that the miners are transferring into and out of their wallets, respectively.

From the graph, it’s visible that the BTC miner outflow spiked during the crash, which makes sense as the miners had made some transfers from their wallets toward exchanges.

The miner inflow, however, had also registered high values at the same time, meaning that fresh coins had entered back into the wallets of these chain validators.

This would suggest that some of the miners may have used the opportunity of the crash to expand their holdings. The “miner reserve,” the other metric of interest here, measures the total amount of Bitcoin that this cohort is carrying in its wallets right now and this indicator’s data would confirm that the holdings of the miners have actually gone up during the price drop.

So, while some Bitcoin miners may have contributed to the selling pressure, others have more than made up for it by accumulating more of the cryptocurrency.

BTC Price

As mentioned before, Bitcoin has now seen a complete retrace of the returns from the latest rally, bringing the asset back to the $26,000 level it had previously been consolidating at.Bitcoin Price Chart

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Another Bitcoin Metric Is About To Reach A New All-Time High Despite The Bear Market

The price of Bitcoin has taken a beating in the past month. The leading cryptocurrency by market cap is down by more than 11% from its price in July and has lost more than $50 billion in market cap since then. 

While the price plunge has been painful for investors, Bitcoin miners have also been feeling the sting as mining revenue per computing power has been dwindling for the past few months. On the other hand, Bitcoin’s hashrate has soared to high levels as mining farms continue to come online.

Bitcoin Hashrate Reaches All-Time Highs Despite Bear Market

Over the last year, Bitcoin’s hashrate (the total combined computing power of miners) has almost doubled. Data from Blockchain.com shows that the Bitcoin network hash rate surpassed 414 terahashes per second (TH/s) for the first time on August 16. 

This metric has since retraced to 390 TH/s, but it is expected to rise further in the coming weeks as miners bring on more computing power to break even on their mining operations. The higher the hashrate, the more difficult it becomes to mine BTC and earn rewards. This means that miners are now making less BTC per terahash of computing power than ever before. 

Data from Hashrate Index shows this figure is now at $0.06016 per terahash/second per day. In comparison, this figure was at $0.08124 on May 8 during the rise of Bitcoin Ordinals and Inscriptions. A further decline from here would see mining revenue fall below the lowest point in November 2022.

How Miners Are Adapting To Stay Profitable

The Bitcoin mining industry has proven itself resilient, even during the depths of the crypto winter. According to data from investment information platform MacroMicro, the current average cost to mine a BTC stands at $45,877 with the current price of BTC now at $25,936. 

Bitcoin price cap chart from Tradingview.com (Metric)

To remain profitable with the rising hash rate, Bitcoin miners have had to adjust their operations. Publicly traded mining companies like Marathon Digital and Riot Platforms have had to raise about $440 million through stock sales. 

Bitcoin miners have also avoided selling their $900 million BTC, as it could trigger a major selloff from investors. While previous on-chain data have shown miners sending a significant amount of coins to exchanges, miners have been expanding their reserves recently. 

BTC Mining Outlook

The outlook for Bitcoin mining economics in the coming months is uncertain but potentially promising if the hashrate continues to increase. The next Bitcoin halving is expected to take place in April 2024, slashing block reward by 50%. 

When the halving occurs, things could even get tighter for miners, as they would have to increase mine more blocks to break even. Nevertheless, big BTC mining companies are already on track for this adjustment. Marathon Digital, for example, was able to achieve a 54% boost in its hashrate during the second quarter but reported a net loss of $21.3 million.