Bitcoin miners poised to offload BTC as mining revenue plunges: Kaiko data

A bitcoin selloff likely looms large as the token’s miners face pressure to offload their holdings amid a steep revenue drop-off, crypto research and analytics firm Kaiko’s data shows. However, both businesses are bringing in more modest returns in recent weeks.

April’s halving event, the long-ago coded reduction in mining rewards to 3.125 BTC from 6.25 BTC, posed a unique headwind for miners trying to cover their overhead. “The halving has typically been a selling event for Bitcoin miners as the process of creating new blocks incurs significant costs, forcing miners to sell to cover costs,” Kaiko researchers said in a new report.

Meanwhile, miners’ other revenue stream — the transaction fees they charge to process traders’ transactions more quickly —is also drying up. In the first week of May, miners' profits from transaction fees remained lower than their earnings from mining bitcoin. A potential bitcoin sell-off could have a major impact on the crypto market, especially at a time of lower market liquidity. Mining companies such as Marathon Digital, which holds $1.1 billion worth of bitcoin, need only sell a fraction of its holdings to create dramatic market movements, according to Kaiko.Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block.

Source: Digital Coin News (digitalcoinnews.net)

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