Analysis

Miners sell stocks and bitcoin as gains halve since November

Bitcoin miners are starting to scramble for cash and need a boost as BTC’s price has fallen significantly since November and revenue has fallen even further due to increased competition.

With Bitcoin (BTC) currently trading at $43,959, about 33% below the all-time high of $69,000 (ATH) it hit on Nov. 10, 2021, miners are selling at less opportunistic times. However, the cost of electricity and appliances must be paid.

Data from on-chain analytics firm Glassnode shows Bitcoin miners have turned into net sellers after holding for months.

According to blockchain research firm Arcane Research, 1BTC mining profits for the two most popular mining devices, the S9 and S19, have fallen by an average of 50.5% since Nov. 9. This means that investment returns have declined faster than the BTC price.

The sharp increase in hashrate has contributed to the decline in mining profitability. Competition among miners increases with hashrate as it means more devices have been turned on to compete to find the next block.

CoinCu reported on Feb. 13 that bitcoin hashrate hit a new ATH, rising from 188.4 exahashes/s (EH/s) to 284.11 EH/s in one day and currently at 232.19 EH/s located.

Some big miners have chosen to raise their cash or pay bills by selling stocks instead of cryptocurrencies. On February 11, a spokesman for mining company Marathon Digital Holdings Inc (MARA) said:

“We started holding from October 2020 and haven’t sold a single satoshi since then.”

Instead, Marathon filed with the Securities and Exchange Commission (SEC) to sell $750 million worth of stocks and securities. Seeking Alpha reports that Marathon intends to use “a significant portion” of mining and general purchases.

An analyst at asset management firm DA Davidson pointed out on February 14:

“The big miners would rather sell equity because their shareholders want them to hold bitcoin and not even think about selling it.”

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.