With Bitcoin’s fourth halving approaching in 74 days, Bitcoin miners are actively preparing for the potential decrease in rewards. According to data from CryptoQuant, Bitcoin miners’ reserves have decreased by about 8,400 coins since the beginning of the year, reflecting that mining companies may be selling Bitcoin to raise funds for expanding their computational power.
As Bitcoin is about to experience its fourth halving in April this year, market investors are eagerly anticipating a bull market similar to the past halvings. However, institutional surveys have also warned that mining companies will face severe losses if the coin price does not rise significantly after the halving.
According to the latest data from CryptoQuant, Bitcoin miners currently hold approximately 1.8264 million coins. The last time this level was reached was in June 2021, and compared to the 1.8348 million coins at the beginning of the year, reserves have decreased by about 8,400 coins.
The reason why mining companies are selling Bitcoin is mainly to raise funds for upgrading machinery and mining facilities to improve mining efficiency and competitiveness, as reported by the cryptocurrency exchange Bitfinex on Monday. The report points out that these miners are preparing for the upcoming halving event, which will have a significant impact on mining companies’ profitability, especially for smaller and less efficient ones, potentially leading to bankruptcy or forced mergers.
Matthew Sigel, Director of Digital Asset Research at VanEck, also pointed out that some miners have started selling more tokens to improve their balance sheets and provide funding for capital expenditures to cope with the difficult period of reduced profitability after the halving. He stated, “Scale will become even more important after the halving.”
Although most miners are still long-term holders, their short-term selling behavior does put some pressure on the Bitcoin price.
However, data analyst DataScope observes the impact of miners’ selling on the Bitcoin market from another perspective. By analyzing the data of Bitcoin transferred by miners to exchanges, DataScope emphasizes that miners’ strategies not only affect the short-term price of Bitcoin but also have an impact on its long-term economic model. Therefore, tracking how miners use their reserves and their behavior in the market is crucial for investors and market analysts.
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