Miners have held the least amount of Bitcoin on their balance sheets since February 2010, but the dollar value of their reserves is hovering around an all-time high.
The amount of Bitcoin held by miners has fallen to its lowest level in more than 14 years, according to data from IntoTheBlock.
On June 19, miner reserves fell to 1.90 million BTC
After starting the year with 1.95 million Bitcoin.
Miners have held the smallest amount of Bitcoin since February 2010. Source: IntoTheBlock
According to Lucas Otomuro, head of research at IntoTheBlock, miners are expected to hold less Bitcoin over time as the halving puts pressure on their margins, making them more vulnerable to selling their reserves.
In Bitcoin's proof-of-work consensus mechanism, miners are rewarded with new bitcoins in exchange for validating transactions and securing the network. Miner reserves refer to unsold Bitcoin held by miners.
About every four years, the network's mining support is split in half.
The last halving, which occurred on April 20, 2024, reduced mining rewards from 6.25 BTC to 3.125 BTC.
“However, historically, this has been at a relatively slow rate, so it has not been a significant selling pressure,” Otomuro told Cointelegraph.
Despite the pay cuts, miner reserves measured in US dollars were hovering around an all-time high of around $135 billion. This means that even though Bitcoin producers hold fewer Bitcoins, the dollar value of Bitcoins is higher.
US dollar miner reserves hover around a record range. Source: IntoTheBlock
“Today’s miners seem to have learned from previous cycles,” Sascha Grumbach, CEO of Green Mining DAO, said in a written comment shared with Cointelegraph.
“Gone are the days of being over-leveraged and holding on to too much Bitcoin, a strategy that has backfired in the past.”
A report issued by CoinShares in April predicts that the Bitcoin hash rate will rise in 2025 after a post-halving decline.
Lower Bitcoin rewards and competition cause the amount of Bitcoin produced per unit of hash power to decrease over time, raising production costs
“[Miners'] focus appears 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,” Grumbach concluded.
#BNBHODLer #Megadrop #LayerZero #BinanceTournament #AirdropGuide