Key takeaways:
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Bitcoin miners sold $485 million worth of BTC during a 12-day period ending Aug. 23.
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Despite miners selling, Bitcoin’s network hashrate and fundamentals remain resilient.
Bitcoin Miners Offload $485 Million in BTC Amid Market Volatility
Bitcoin (BTC) recently made a notable recovery, reclaiming the $112,000 mark on Thursday after hitting a six-week low just two days earlier. Despite this rebound, there is a palpable sense of unease among traders, as Bitcoin miners have been offloading coins at the swiftest rate observed in the past nine months. This trend raises questions about whether this is an early indicator of larger issues or if other factors are influencing these significant outflows.
Data from Glassnode indicates consistent reductions in miner wallets from Aug. 11 to Aug. 23, with no evident signs of fresh accumulation since. The last instance of persistent withdrawals exceeding 500 BTC per day occurred on Dec. 28, 2024, following Bitcoin’s repeated inability to maintain levels above $97,000.
In this recent selling wave, miners offloaded 4,207 BTC, equating to approximately $485 million, over the 12-day period ending Aug. 23. This contrasts with the accumulation phase between April and July, when miners added 6,675 BTC to their reserves. Current miner balances stand at 63,736 BTC, valued at over $7.1 billion.
Market Implications and Miner Profitability
While these outflows are modest compared to the allocations from major corporations like MicroStrategy (MSTR) and Metaplanet (MTPLF), they often incite market speculation and Fear, Uncertainty, and Doubt (FUD). If miners face tighter cash flows, selling pressures could intensify unless profitability conditions improve.
Over the past nine months, Bitcoin has appreciated by 18%, but miner profitability has declined by 10%, according to data from HashRateIndex. Increased mining difficulty and reduced onchain transaction demand have squeezed margins. Although the Bitcoin network continues to adjust to maintain an average block interval of 10 minutes, profitability remains a concern.
The Bitcoin hashprice index currently stands at 54 PH/second, down from 59 PH/second a month ago. Nevertheless, miners have little reason to complain: the index has significantly improved from levels seen in March. According to NiceHash data, even Bitmain’s S19 XP rigs from late 2022 remain profitable at $0.09 per kWh.
Bitcoin Miners Face AI Competition but Maintain Resilience
Some investor disappointment arises from a growing shift towards artificial intelligence infrastructure. This narrative gained traction following TeraWulf’s (WULF) $3.2 billion deal with Google for a 14% equity stake, aimed at expanding TeraWulf’s AI data center campus in New York, set to commence operations in the latter half of 2026.
Other miners are pursuing similar strategies. Australian firm Iren, once known as Iris Energy, is accelerating the acquisition of Nvidia GPUs and constructing a liquid-cooled AI data center in Texas, alongside a new site in British Columbia set to house up to 20,000 GPUs. Meanwhile, Hive, previously Hive Blockchain, has committed $30 million to expand their GPU-powered operations in Quebec.
Despite the AI buzz, Bitcoin’s fundamentals remain robust. The network hashrate is approaching an all-time high at 960 million TH/second, marking a 7% increase over the past three months. This strength mitigates concerns about miners’ net outflows or the lack of profitability gains within the sector.
There is no clear evidence that miners are under immediate pressure to liquidate positions, and even if selling persists, inflows into corporate reserves are more than capable of offsetting the impact.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Source: Cointelegraph
