The number of Bitcoin (BTC) held by crypto miners has fallen to its lowest level since July 2021, as crypto miners depleted their stash of coins ahead of a planned halving of revenue earned per block.
The estimated number of BTC held in wallets associated with miners has decreased by 8,426 BTC ($530 million) since the beginning of the year to 1,812,482 BTC, according to data tracked by Glassnode. The decline started in late October, when miners held over 1.83 million BTC.
Miners create valid blocks and add transaction records to the public ledger or blockchain. New coins issued in each block are given to miners as a reward for their work. We also receive transaction fees.
Currently, miners receive 6.25 BTC per block. The halving, a quadrennial event scheduled for April, will reduce that number to 3.125 BTC, reducing revenue per block by 50%. To improve profitability, miners may be using stored BTC to buy more efficient equipment and lower running costs, according to Toronto-based cryptocurrency platform FRNT Financial. It is said that there is.
“Miners may also be inclined to sell to secure a favorable position ahead of the halving,” FRNT Financial said in a Tuesday newsletter. “This could include purchasing more efficient mining equipment due to the new economics that halving brings.”
The halving is widely seen as a stress test for miners, as it is expected to simultaneously reduce revenue and increase production costs. Industry consolidation is possible.
The prolonged dry season in southwestern China, which typically runs from October to March or April, could be another reason for the decline in miners' Bitcoin balances. China accounts for about 20% of the total computing power on the Bitcoin network.
“Miners in some regions of China are known to bring additional hardware online during the rainy season when hydropower is abundant. Perhaps miners sell it during the dry season to compensate for the non-operation of mining hardware. FRNT Financial said.
