Report: Bitcoin miners halt liquidation of cryptocurrency reserves

In August and September 2022, publicly traded mining companies sold fewer bitcoins than they mined. This marked the first such occurrence since May, according to Hashrate Index.

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— Hashrate Index (@hashrateindex) October 19, 2022

In June, public miners liquidated a total of 23% of Bitcoin reserves, selling 14,600 BTC. In July, firms sold 5,767.9 BTC with a total mined of 3,478 BTC.

Throughout the third quarter, market conditions continued to pressure miners’ financial resilience, experts added. However, the pace of selling mined bitcoins slowed.

In the United States, where public miners conduct the largest share of operations, the cost to produce 1 BTC year on year rose by more than twofold in some states, driven by higher hashrate and electricity tariffs.

Before the surge in energy prices, a typical hosting contract charged about $0.05-0.06 per kWh; now it has risen to $0.08-0.09. Many providers have shifted from an all-inclusive model to revenue-sharing arrangements, experts noted.

Meanwhile, most hosting operators have approached the break-even point even when deploying latest-generation ASIC miners such as the Antminer S19j Pro.

\”During the quarter, publicly listed companies continued to put up mining rigs and bitcoins to finance operations and repay loans; sales of troubled assets began to rise, and we witnessed the first major bankruptcy in a bear market,\” — analysts noted.

Hashrate Index noted that in the third quarter deliveries of Antminer S19 XP began. After the first quarter, futures prices for these Bitmain devices rose above those for comparable units (with energy efficiency of over 38 J/TH). Experts say the premium trend will persist for several more weeks.

Analysts at Glassnode estimate that if Bitcoin’s price falls below $18,300, 78,400 BTC held by miners could be at risk of liquidation.

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