Almost all of the Bitcoin mined in 2022 by publicly traded Bitcoin miners was sold off, which sparked discussion about whether or not the price of Bitcoin was subjected to “a persistent headwind” as a result.
Roughly 40,300 of the 40,700 BTC mined by Core Scientific, Riot, Bitfarms, Cleans Park, Marathon, Hut8, HIVE, Iris Energy, Argo, and Bit Digital between January 1 and November 30 were sold immediately.
As the crypto sector struggled to recover from the fallout from the FTX, mining companies’ reserves shrank significantly in the second half of 2022, notably in November. The price of the biggest cryptocurrency is under downward pressure because miners are constantly selling off newly created Bitcoin.
Yet, some industry observers, including Arthur Hayes, the former CEO of BitMEX, think the selling pressure brought on by the rise in sales of Bitcoin miners is merely marginal.
On average, the daily trading volume of Bitcoin on December 26 was $12.2 billion. Data from CryptoQuant suggests that the outflow from miners on the same day was 919 BTC ($15.35 million), which accounts for barely 0.13% of the entire volume exchanged.
In December, the miner’s reserves slightly increased by over 1%. The data supports the opinion expressed in a post by cryptocurrency analyst IT Tech on December 27 that things for miners appear to be normalising. Mining difficulty has also come down because miners in Texas have turned off their mining rigs due to harsh weather conditions
High electricity costs, declining cryptocurrency market prices, and an increase in mining difficulty have all hurt miners’ bottom lines throughout the year. Miners like Core Scientific have been compelled to sell some of their reserves at a loss in order to pay for their continued operations and efforts to expand as a result of the miners’ rising cost of production and the Bitcoin price’s declining value.