Active Bitcoin Miners Are Now ‘Unlikely to Sell’ With Soaring Profits

Bitcoin (BTC) miners “are unlikely to put pressure on BTC price by selling coins in the coming weeks, new data said.

As part of its latest weekly report, The Week On-chain, analytical source Glassnode sought to allay fears of another major mining company being sold off.

It’s hard to drop presents for the rest of the miners

With the ongoing transfer of mining equipment – and hence the Bitcoin hash rate – from China, concerns have arisen that miners are selling BTC to cover costs and liquidation.

Given the magnitude of the geographic change – the route in China marks the largest hash rate change in history – miners can create selling pressure by handling coins that may not move for a long time.

The combined effects of the sale and the falling hash rate provide “double profit” for the Bitcoin price action, reducing the likelihood of a significant increase or even maintenance of support levels.

For Glassnode, however, the situation appears to be under control. Miners are on the go, and those who are still online are facing headwinds.

This is because the Bitcoin difficulty will drop nearly 25% by the end of this week – again the biggest drop ever – meaning Bitcoin mining will be more profitable for those who use it.

As a result, the incentive to sell will be less, as the network participants remain in an upward spiral of profits until the missing hash rate returns and the level of difficulty increases.

“The Bitcoin mining puzzle is 23.6% more difficult despite a 154% sales growth on the 7-day average,” the report explains.

“Since a large part of the hash power is currently offline and on the move, the next difficulty adjustment is estimated at -25%. As a result, miners who stay active are likely to make more profits in the coming weeks unless price continues to correct or pushes hash power back online. “

Glassnode added that miners are more likely to liquidate funds over time as part of this move.

“This largely suggests that active miners are unable to make excessive forced sales … and therefore, Chinese miners who liquidate government bonds are more likely to be the source. Dominate the seller,” it concluded.

Expensive opportunity

Meanwhile, a separate source has highlighted how lucrative mining can be in the current circumstances.

Related: World’s First Bitcoin ETF Adds $ 3M daily during the BTC drop

Using data brings Bitcoin’s energy consumption to around 2,520 gigawatt hours in two tough weeks, author Hass McCook underlined Miners have a 75% chance of winning with specific capital and operating costs.

If the maximum cost to mine 1 BTC is $ 20,000, the difference between that expense and the spot price, which at press time is $ 34,500, is clear.

“So if the worst-case cost to mine a coin is around $ 20,000 (probably nearly $ 13-14,000 today for pro shops), you’d work so hard to make over 75% profit to provide for you …? McCook closed.