Although the quantity of Bitcoin miners have on their balance sheets is at its lowest point since February 2010. The value of their reserves in fiat currency is almost at an all-time high.
Miners are currently holding the least amount of Bitcoin in more than 14 years, based on data from IntoTheBlock.
Miner reserves decreased from 1.95 million Bitcoin (BTC) at the start of the year to 1.90 million BTC as of June 19.
Miners hold the smallest amount of Bitcoin since February 2010.
Head of research at IntoTheBlock Lucas Outumuro predicts that as time goes on, miners will hold fewer Bitcoins because the halving lowers their profitability. This forces them to sell more of what they already have.
By confirming transactions and safeguarding the network, miners in Bitcoin’s proof of work scheme get rewarded with extra Bitcoin. The Bitcoin that miners own but haven’t yet sold is known as their miner reserves.
The amount of new Bitcoin miners being awarded decreases by half about every four years.
The most recent halving reduced mining rewards from 6.25 BTC to 3.125 BTC on April 20, 2024.
Outumuro informed Cointelegraph:
“That being said, historically, this has been at a relatively slow rate, so it hasn’t been a major selling pressure.’’
The value of miners’ deposits in US dollars has remained close to its highest peak ever, over $135 billion. Even though they are making less Bitcoin. This demonstrates that despite having fewer Bitcoins, their value in dollars is higher.
Miners reserves in U.S. dollar value are hovering around a record range. Source: IntoTheBlock
“It seems today’s miners have learned from past cycles,” the CEO of tokenized mining startup Green Mining DAO, Sascha Grumbah, said in a written statement sent to Cointelegraph.
“Gone are the days of overleveraging and holding onto too much Bitcoin, a strategy that backfired in the past.”
In April, CoinShares released an analysis indicating that after a brief decline following the halving, Bitcoin’s computing power, or hash rate, should rise in 2025.
Over time, the quantity of Bitcoin generated per unit of processing power decreases as competition increases and Bitcoin payouts decrease. Higher production costs for Bitcoin result from this.
“[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,” stated Grumbach.
