The broader crypto market has been in a state of a downward price swing, with Bitcoin going lower almost daily. Before now, Bitcoin miners have put away some BTC tokens waiting for their sunny days to reap. However, the continuous price drop of virtual assets has set a constant downtrend for the most significant crypto token.
Hence, miners are selling out their holdings to flatten the rising costs of operations and other activities as Bitcoin makes some rebounding steps.
As per reports, there is an increase in the transfer of BTC tokens from miners to exchanges. The record shows a progressive rise from January, with the highest value for May at 195,663 BTC. With BTC’s average price of $32K in May, the total value is $6.3 billion for the sold tokens.
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The high value could not possibly be just a sell-off from miners. Some of them could move their holding for other transactions in exchanges. Also, some prominent firms might have transferred vast amounts of the BTC tokens for sale through exchanges.
With Bitcoin’s price having dropped about 35% this year, different categories of sellers are emerging in the market. Some small-scale miners encountered enormous liquidation challenges.
Riot Blockchain Inc. is part of the sellers. The public trading miners were involved in BTC stockpiling through price bets for token appreciation. In addition, equity investors have been using the firm as a proxy to receive cryptocurrency exposure that cuts absolute ownership of the assets.
With the trend of events within the bear market, holding on to cash for large-scale miners is becoming more complex. This is due to the inability to raise funds through stock sales or debts. Hence, they are placing their hunts for more profit through possible expansions.
An example is the recent Riot’s ongoing mining facility which they are building in Texas with a 1-gigawatt capacity. This new move was a project kick-off after they finished their mining farm of 750 megawatt, which remains among the largest ones in the US.
While reacting to the situation, Will Foxley, Compass Mining’s content director, offers his opinion on the BTC sales. He stated that miners might be focusing on a larger crypto environment. Hence, they see it as a wise opportunity to sell their BTC holdings to retain the safety of their operations.
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The entire saga falls back on the challenges miners face during the low-price drop in the market. Some miners have ordered machines in the BTC bullish trend for months. So, even with the price drop, they are still expected to complete the payment.
Matthew Schultz, CleanSpark executive chairman, reports that some miners will have no option of weathering the storm but to liquidate their holdings.
Featured image from Pexels, charts from TradingView.com