The regained profitability will probably be used by many Bitcoin miners as an opportunity to sell.
While Bitcoin (BTC) is trading at its highest levels since January 2018, the mining of the market-leading crypto currency is becoming increasingly profitable for several reasons.
According to data from Blockchain.com, Bitcoin miners‘ sales have now risen to levels not seen since the halving in May 2020. As part of the „halving“ of Bitcoin, the so-called block reward has been reduced from 12.5 BTC to 6.25 BTC, which makes the newly achieved profitability all the more astonishing.
The turnover of the BTC miners reached a value of 20.8 million US dollars on 4 November, which is also the highest value since September 2019, when the block reward was twice as high as now.
Sales of Bitcoin Miners in US dollars. Source: Blockchain.com
The sudden jump in sales of crypto-miner is mainly due to the fact that the Bitcoin price has doubled since the halving in May. Thus, on November 4, a previous annual high of US$15,950 was reached, with the price having risen by more than 20% in the last seven days.
Another reason for the increase in mining revenues is the higher transaction fees of Bitcoin. As reported by Cointelegraph, these had gone up by 200% in October. Accordingly, the share of transaction fees in Miner’s turnover has increased and currently amounts to $4.15 million or 20%.
As the situation for the miners is now more profitable than ever, some of them are likely to take the opportunity to realise their profits.
As the market researchers at CryptoQuant assume, many miners will therefore sell their „mined“ Bitcoin. This theory is confirmed by the Miner Position Index, which is currently at 4, with a value of 2 indicating that the miners are looking to sell.
Selling off the miners. Source: CryptoQuant
There is also a clear peak in transactions from miners to crypto exchanges after the Bitcoin price climbed above the USD 15,000 mark. Although the volume is still relatively small compared to pre-halving, the selling pressure created by the miners could possibly torpedo Bitcoin’s current boom.
CryptoQuant CEO Ki Young Ju gives the all-clear, however, because he suspects that the miners will play it safe for the time being, but in fact also expect share prices to rise and will therefore hold on to most of their crypto assets.