Its April 2023 bitcoin sale trended lower than some of the last few months, as it sold 700 bitcoins in January, 600 BTC in February and 675 bitcoins in March. The Texas-focused miner started selling a portion of its monthly bitcoin production in March 2022. Riot Platforms too sold 600 of the 639 bitcoins it mined last month, generating net proceeds of approximately $17.6 million. “I believe we will see a lot more of this.” Who’s selling and how much? “Miners don’t want to sell at a price below the cost of production, but sitting on large stashes of bitcoin gives miners the option to sell in times of need,” Abbott explained. While miners previously might have looked to secure loans instead of selling bitcoin, opportunities to raise capital in the debt or equity markets have become more rare. “This not only diluted their shares but also left a large number of them with unpayable debt, a large number of bitcoins purchased at a very high premium, and new machines without the ability to energize those machines after the bull cycle had ended,” he explained. Nishant Sharma, founder of bitcoin mining research and consulting firm BlocksBridge, noted that many miners took on an “unhealthy amount of debt” to buy more machines with “unbelievably long lead times” as they continued to hold mined bitcoins in the bull market of 2021. “Miners with excess leverage could not sustain their interest payments.” “The triple effect of ramping network difficulty, fiat price bear market, and a global energy crisis in 2022 combined to make conditions tougher for miners than they have been for a long time,” said Andy Long, CEO of crypto mining firm White Rock Management. That new economic world includes bitcoin mining that is not as profitable as it once was due to higher operational costs and energy prices, as well as a potential looming global recession. “Most will want to hold onto what they can afford to keep their valuation high for shareholders, but others will need to sell to survive the new economic crypto world we are now in,” she told Blockworks. At least for now.įor the many miners that had historically stashed bitcoins and waited for the price to go up, their success was greatly exposed to the asset’s upside and downside, according to Louise Abbott, a crypto-focused partner at Keystone Law.
The days of extreme bitcoin hoarding could be over, according to industry participants. Crypto miners during the bull run touted their HODL strategies.
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