- Bitcoin miners may be facing a selloff due to a sharp decline in revenue following the April 20 halving which slashed block rewards from 6.25 BTC to 3.125 BTC.
- The recent halving cut the daily production from 900 to 450 BTC, resulting in around $10 billion in revenue loss per year.
- Two of the largest public Bitcoin mining companies, Marathon and Riot, hold significant amounts of BTC, which could lead to selling pressure from miners.
Bitcoin miners are facing increasing pressure due to a decline in revenue following the recent halving, potentially leading to a significant selloff.
Miner Selloff Imminent?
Following the April 20 halving, which slashed block rewards from 6.25 BTC to 3.125 BTC, miners are facing a sharp decline in revenue. Crypto research firm Kaiko revealed that the halving cut the daily production from 900 to 450 BTC, resulting in around $10 billion in revenue loss per year. Miners were initially able to keep revenue streams buoyed by high transaction fees from the meme coin frenzy and Bitcoin Runes launch, however, activity has dwindled on both fronts since.
Impact on Major Mining Companies
Two of the largest public Bitcoin mining companies, Marathon and Riot, hold 17,631 BTC worth just over $1.1 billion and 8,872 BTC worth over $500 million, respectively. Transaction fees accounted for 16% of BTC earned by Marathon Digital in April, up from 4.5% in March. Kaiko noted that the recent decline in fees could lead to selling pressure from miners. If miners were forced to sell even a fraction of their holdings over the coming month, this would have a negative impact on markets.
Hash Price Woes
Profitability, or hash price, has slumped in recent weeks and is currently $0.050 terra hashes per second per day, according to HashRateIndex. This is down 72% from the $0.182 TH/s/day it reached around the time of the halving. The average network hash rate also hit a peak of around 650 EH/s in late April, further compounding miner woes as competition for the next block reward intensifies.
Conclusion
The recent halving has had a significant impact on Bitcoin miners, leading to a sharp decline in revenue and potential selling pressure. Major mining companies like Marathon and Riot could be particularly affected. The situation is further compounded by a slump in hash price and increased competition for block rewards. The coming months will be crucial in determining the impact of these developments on the wider crypto market.
