Public mining companies sold almost all Bitcoin mined in 2022, putting pressure on the price of the cryptocurrency. Messari senior analyst Tom Dunleavy pointed this out.
BTC miners sell roughly 100% of the coins they mine
The 10 public bitcoin miners
detailed here mined ~40.7k BTC and sold ~40.3k in 2022This is a persistent headwind for BTC and for no other reason a good thesis to be bullish the ETHBTC ratio trade pic.twitter.com/L1iI6Z07p7
— Tom Dunleavy (@dunleavy89) December 26, 2022
According to him, the 10 publicly traded on exchanges firms mined about 40,700 BTC since the start of the year and sold about 40,300 BTC.
“This is a persistent headwind for Bitcoin. For no reason is this a good thesis for a bullish stance on the ETH/BTC pair,” said the expert.
In May, public mining companies first sold roughly 100% of the BTC mined, and in June they began liquidating accumulated reserves. The trend continued in July, showing a pullback in August-September.
Among leading miners, only Marathon Digital and Hut 8 confirmed their commitment to a digital-gold accumulation strategy. Investors noted the maintenance of large Bitcoin positions in Riot Blockchain and HIVE.
Most commentators did not agree with Dunleavy’s conclusions, pointing to the small share of miners’ sales compared with daily cryptocurrency trading volume.
“Bitcoin miners’ annual revenue is $10 billion. The daily trading volume is $2.4 billion in a bull market. Seriously?” wrote Compass Mining’s PR director William Foxley.
there’s $10 billion in revenue for Bitcoin miners per year
Bitcoin daily trading volume is $2.4 billion during a bera.
this your take fr?
— Will Foxley 🧭 (@wsfoxley) December 27, 2022
Dunleavy also cited a recent Hashrate Index study by Jaran Mellerud. According to the analyst, even miner liquidations of 300% of daily production do not exceed 0.63% of Bitcoin’s spot market volume.
Abysmal small amount (< 0,3%) compared to daily spot trading volume. pic.twitter.com/wcohr31oFF
— 🐱 Ji @ crypto-cafe (YT)🐱 (@0xCryptoCafe) December 27, 2022
BlockTower Capital founder Ari Paul, for his part, supported Dunleavy.
“And yet selling pressure even at $1 billion typically leads Bitcoin to lose more than $30 billion in market value. Don’t be fooled by liquidity figures. It is very misleading in terms of market impact,” he noted.
And yet $1b of sell pressure routinely makes BTC lose $30b+ in market cap…don’t be fooled by the liquidity numbers. Very misleading in terms of market impact. Most of that liquidity vanishes at first hint of trend.
— Ari Paul ⛓️ (@AriDavidPaul) December 27, 2022
Users also noted that Dunleavy explicitly pointed to potential Ethereum advantages over Bitcoin. The expert likely meant the network’s switch to the Proof-of-Stake consensus mechanism as a result ofthe Merge update in September.
Bitcoin has since fallen from $20,256 to $16,677 — roughly 17.6%. Ether (ETH) prices fell from $1,635 to $1,196, about 27% (CoinGecko).
“Miner capitulation is a short-term phenomenon. 2022 does not provide a basis to forecast that it will be permanent. Moreover, selling distributes BTC more broadly among the community than PoS, which concentrates coins among the top holders/validators,” said former trader Dan Ripoll.
Miner capitulation is a short term phenomenon. You can’t project 2022 forward and assume this will happen continuously. Plus, the selling distributes BTC more broadly among the community vs PoS which concentrates coins among the top holders/validators.
— Dan Ripoll (@danieleripoll) December 27, 2022
As a reminder, in November Hashprice hit historical lows at $0.056 per 1 TH/s, while mining difficulty, by contrast, reached a record high of 36.95 trillion. Against this backdrop, Bitcoin miners’ total revenue plunged 20% from the previous month—to $473.2 million, according to ForkLog’s analytical report.
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