Analysts at the blockchain firm Kaiko suggest that Bitcoin’s recent halving might soon force miners to sell their crypto holdings.
Bitcoin miners are beginning to feel the squeeze as daily average network fees, which spiked after the halving, have started to decline, according to Kaiko analysts.
In a recent report, analysts at the Paris-based firm noted that daily average network fees jumped following the halving, giving Bitcoin miners some relief. However, these fees have since “come down as the initial rush of users to the Runes protocol cooled off,” the firm explains.
Historically, halving events tend to trigger selling among Bitcoin miners because creating new blocks involves significant costs, which they need to cover by selling their crypto holdings. Although the recent surge in average network fees partially offset the need to sell, Kaiko notes the recent drop in fees “could lead to selling pressure from miners.”
According to CoinShares head of research James Butterfill, Bitcoin miners are “beginning to turn off unprofitable rigs” to manage expenses instead of selling Bitcoin. However, the timing of any potential selling remains uncertain.
Kaiko points out that miners typically classify their Bitcoin holdings as “current assets” on their balance sheets, since they can sell these holdings to cover operating expenses. For example, Marathon Digital holds 17,631 BTC valued at over $1.1 billion, while Riot Platforms holds another 8,872 BTC worth over $500 million. The analysts add that “if miners were forced to sell even a fraction of their holdings over the coming months, it could negatively impact the markets.”
Summary Review: Bitcoin miners are facing increased financial pressure following the recent halving event. Although the initial surge in network fees provided temporary relief, the subsequent decline in fees may force miners to sell their crypto holdings to cover costs. While some miners are choosing to turn off unprofitable rigs to manage expenses, the potential for increased selling remains a concern. This situation could impact the market if miners decide to sell a significant portion of their holdings. As the industry adapts to these changes, the financial strategies of Bitcoin miners will be crucial in determining the market’s response.
Disclaimer: Remember that nothing in this article and everything under the responsibility of Web30 News should be interpreted as financial advice. The information provided is for entertainment and educational purposes only. Investing in cryptocurrency involves inherent risks and potential investors should be aware that capital is at risk and returns are never guaranteed. It is imperative that you conduct thorough research and consult with a qualified financial advisor before making any investment decision.
