Since the halving on April 20, Bitcoin miners have faced major challenges due to a sharp drop in revenue. The halving reduced the block reward from 6.25 BTC to 3.125 BTC, sparking fears of a massive sell-off wave from miners.
Based on data released by crypto research firm Kaiko on May 13, Bitcoin's daily production was reduced from 900 BTC to 450 BTC, which resulted in an annual revenue loss of around $10 billion (around Rp148 trillion) based on current prices.
The miners were initially able to maintain their revenue stream thanks to the high transaction fees resulting from the meme coin fever and the launch of Bitcoin Runes. However, activity in both sectors has declined significantly.
Bitcoin Miners Will Sell BTC?
According to Kaiko's report, the two largest Bitcoin mining companies that went public, Marathon and Riot, each hold 17,631 BTC worth more than $1.1 billion (around Rp16.3 trillion) and 8,872 BTC worth more than $500 million (around Rp7.4 trillion).
In April, transaction fees accounted for 16% of the BTC earned by Marathon Digital, up from 4.5% in March. However, Kaiko noted that the latest drop in transaction fees could lead to selling pressure from miners.
"If miners are forced to sell even a fraction of their holdings in the coming months, this will have a negative impact on the market," the report reads. "Trading activity typically slows, and liquidity dries up during the summer months," he added.
Also read: Bitcoin Mining vs Bitcoin Transaction Validation
"Will $BTC miners be forced sellers when costs come down? Higher transaction fees offset lower miner rewards in April, but this has reversed. Our latest report reveals this trend in more depth," Kaiko's data reads.
The report also mentions that Bitcoin miners sold most of their reserves amid the crypto crisis in 2022. However, they have held back more in the past two years with a sharp rebound in asset prices, which have risen 350% from a cycle low of $16,500 in December 2022 to a peak of over $73,500 in March.
Major miners like Marathon missed revenue expectations due to these and other factors.
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Miner Revenue Decreases
Profitability, or hash price, has slumped in recent weeks and currently sits at $0.050 per terra hash per second per day, according to HashRateIndex. This is down 72% from $0.182 TH/s/day reached around the time of the halving.
The network's average hash rate also peaked at around 650 EH/s in late April, further exacerbating miners' problems as competition for the next block reward intensified. This is measured in network difficulty, which is also near its peak level of 83.15 T, although it is down from a record high of 88 T on May 9.
With increasing pressure on miners due to declining revenues, declining transaction fees, and intensifying competition, a wave of Bitcoin sales by miners may be inevitable. This could have a significant impact on the crypto market, given the large amount of BTC held by large miners like Marathon and Riot.
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The Impact of Halving Begins to Be Felt
The impact of last April's Bitcoin halving began to be felt among miners. The decline in daily production and annual revenue has sparked fears of a massive sales wave from miners. With revenues drastically reduced and transaction fees starting to fall, miners may be forced to sell some of their BTC reserves.
Conclusion
This can affect market liquidity and cause significant selling pressure. Meanwhile, increased competition for block rewards further adds to the challenge for miners in maintaining their profitability. The crypto market needs to be wary of this possibility, given the huge impact that the actions of major miners can have.
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How to Buy Crypto on Bittime
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To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. In addition, also make sure that you have enough balance by depositing some funds into the wallet. For your information, the minimum asset purchase at Bittime is IDR 10,000. After that, then you can make a crypto asset purchase in the application.
Learn the Complete Guide on How to Buy Crypto on Bittime.
Monitor the price chart movements of Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and does not constitute an offer or solicitation to sell and buy any crypto asset. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices may change significantly from time to time and Bittime is not responsible for fluctuations in crypto asset exchange rates.
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