Bitcoin Miner Reserves Plunge to 14-Year Low of 1.90M BTC

Despite the decrease in Bitcoin holdings, the market capitalization of US-listed Bitcoin mining companies has surged. As of June 15, 2024, the market cap reached an all-time high of $22.8 billion, led by Core Scientific, TeraWulf, and IREN with stock price gains of 117%, 80%, and 70%, respectively.

Glassnode’s analysis shows a steady decrease in Bitcoin miner balances over recent weeks, with reserves now at approximately 1.8 million BTC. This indicates a shift in miner strategy towards maintaining financial stability rather than long-term accumulation of Bitcoin.

Bitcoin miners are currently experiencing an extended sell-off period not seen since 2017. On-chain data analyzed by CryptoSlate’s lead analyst, James Van Stratten, indicates that the Bitcoin market is 33 days into a miner capitulation, which typically lasts about 41 days on average.

Miner capitulation occurs when Bitcoin miners must shut down their machines or sell their BTC to stay operational, often due to unprofitable business conditions. The primary challenge to miner profits is the April halving event, which cut the block subsidy, reducing average daily revenue for miners from approximately 900 BTC to 450 BTC. Network fees, although a source of revenue, remain minimal.

Mining has become highly competitive, with only the most efficient operations maintaining profitability. Despite expectations that large, publicly traded mining firms would endure post-halving, on-chain data suggests even these industry leaders are selling their coins as profit margins narrow.

CryptoQuant reported that miners sold 1,200 BTC in over-the-counter (OTC) trades, primarily initiated by Marathon Digital, the largest publicly traded miner.

On June 18, Bitcoin’s price fell by 2%, reaching approximately $65,152. Currently, Bitcoin remains under pressure around $65,100, hitting an intraday low of $64,700. This drop has created a new resistance level around $66,000, which Bitcoin has yet to surpass, trading at approximately $65,660 as of this writing.