NewsletterBitcoin Miners Are Dumping Tokens, How Will Prices React?
Bitcoin miners have begun selling their holdings on the open market, as a price crash pressured their finances.
A report by Bitcoin miner Compass Mining shows that several U.S.-based miners have begun offloading their holdings on the open market.
Coupled with a decline in Bitcoin prices, miners are also dealing with rising difficulty in mining. This is reducing the profitability of mining.
Data from Bitinfo shows that Bitcoin mining profitability has sunk to its lowest level since mid-2020, with Bitcoin prices hovering around similar lows.
Why are miners offloading Bitcoin?
Compass, citing Coinmetrics data, said miner flows to exchanges reached their highest level since January. The selling had preceded a major dump in Bitcoin prices over the next month, before some relief in March.
Canadian miner Cathedra is the most recent miner to sell the token. In its recent earnings report, the miner said it had sold 235 tokens- almost all of its holdings- in May for total proceeds of $8.8 million.
The company said the sales were to “insulate itself” from additional declines in prices. It now holds about 3.7 tokens.
Miners may begin to sell hodl’d Bitcoin into the open market. At the very least they are feeling the pain after the last major dip in price. Couple this with a downwards difficulty adjustment – indicating miners powering off – and it seems miners may be hitting a wall in profitability.
-Compass Mining Analyst Mitch Klee
No recovery in sight
With Bitcoin now erasing a recent relief rally, sentiment has largely soured towards the crypto market. The token has struggled to break past $30,000 for nearly a month.
While a recent report suggests that markets may have found a bottom, they will also face great difficulty in recovering. With policy tightening by the Federal Reserve, rising inflation and the Russia-Ukraine war, Bitcoin is likely to face a steep climb back to previous highs.
Still, with Ethereum shifting to a proof-of-stake model this year, Bitcoin may see an influx of miners from the former.
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more… to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Premium Partners
Delivered every day.
- Insights that move markets
- 100,000 active subscribers
Related Articles
- Bipartisan Crypto Bill Talks Progress Even as Markup Is Delayed Until Next Year
- Bitcoin, Ethereum, and Solana to Hit New Highs in 2026, Predicts Crypto ETF Issuer Bitwise
- Fed’s Chris Waller Says Labor Market Is ‘Very Soft,’ Signaling Support for More Rate Cuts
- DeepSnitchAI Raising funds to Build AI Intelligence for Investors
- LINK Vs. XRP: Crypto Founder Lark Davis Reveals Who Will Win in the Next Decade
- Bitcoin Price Outlook: Capriole Founder Warns of a Drop Below $50K by 2028
- XRP Price Rare Pattern Points to a Surge to $3 as ETFs Cross $1B Milestone
- DOGE Whales Add 138M Coins in 24 Hours: Will Dogecoin Price Rebound Above $0.15?
- Ethereum Price Outlook Hinges on Whale Moves: Dump Below $2,800 or Reclaim Above $3K Next?
- Solana Price Outlook After Charles Schwab Adds SOL Futures — What Next?
- Pi Network Stares at a 20% Crash as Whale Buying Pauses and Demand Dries
