Bitcoin Miner Reserves Fall to 14-year Low
20 Jun, 2024 ● Coin news
The amount of Bitcoin held by miners has reached its lowest level in over 14 years, according to data from IntoTheBlock.
On June 19, miner reserves dropped to 1.90 million Bitcoin, down from 1.95 million BTC at the start of the year.
Lucas Outumuro, head of research at IntoTheBlock, explained that miners are expected to hold less Bitcoin over time due to the halving, which pressures their margins and makes them more likely to sell their reserves.
In Bitcoin’s proof-of-work consensus mechanism, miners receive new Bitcoin as a reward for validating transactions and securing the network.
Miner reserves refer to the unsold Bitcoin that miners hold.
Approximately every four years, the network’s mining subsidy is halved.
The most recent halving occurred on April 20, 2024, reducing mining rewards from 6.25 BTC to 3.125 BTC.
“That being said, historically, this has been at a relatively slow rate, so it hasn’t been a major selling pressure,” Outumuro told Cointelegraph.
Despite the reduction in rewards, miner reserves measured in United States dollars have remained near their all-time high of about $135 billion.
This indicates that while miners are holding fewer Bitcoin, the dollar value of their BTC holdings is higher.
“It seems today’s miners have learned from past cycles,” said Sascha Grumbach, CEO of tokenized mining firm Green Mining DAO, in a written commentary shared with Cointelegraph.
“Gone are the days of overleveraging and holding onto too much Bitcoin, a strategy that backfired in the past.”
An April report by CoinShares predicts that Bitcoin’s hashrate will surge in 2025 following a post-halving dip.
Declining Bitcoin rewards and increased competition reduce the amount of Bitcoin produced per unit of hash power over time, increasing production costs.
“[Miners’] focus seems to be on short-term financial stability rather than long-term, large-scale accumulation of Bitcoin.”
“In other words, having less Bitcoin is normal in the market phase we are in,” Grumbach concluded.
Sources:
https://cointelegraph.com/news/bitcoin-miner-reserves-lowest-14-years
