20 Jun 2022
Miners have started to dump their bitcoin holdingsThe deteriorating profitability of mining has forced the public miners to start liquidating their bitcoin holdings.
Source: Monthly production updates (All public miners)
Bitcoin miners are the only natural net sellers of bitcoin. They receive 900 BTC daily and seek to hodl as much as possible. Ironically, their hodl ambitions make them sell their precious bitcoin during bear markets since that is when the market forces them to sell.In the first four months of 2022, public mining companies sold 30% of their bitcoin production. The plummeting profitability of mining forced these miners to increase their selling rate to more than 100% of their output in May. The conditions have worsened in June, meaning they are likely selling even more.The public miners only make up around 20% of Bitcoin's hashrate but studying their behavior can hint at what the private miners are doing. Public miners likely sell a larger portion of their mined bitcoin now since they could keep a larger share of their production during the bull market by tapping into financial markets, which was more difficult for private miners.The miners are some of the biggest whales, holding around 800,000 bitcoin, according to CoinMetrics (1 hop), of which public miners own 46,000. If they are forced to liquidate a considerable share of these holdings, it could contribute to pushing the bitcoin price further down.