Amid Bitcoin (BTC) continuous struggle for a major rally to new heights, miners powering the Bitcoin network are experiencing significant economic shifts.
Particularly, recent data shows a stark reduction in Bitcoin reserves held by miners, signaling potential shifts in market stance or miner strategies.
Bitcoin Miner Reserves: A Plunge To 3-Year Low
Following the latest Bitcoin Halving—an event that reduced the block rewards miners earn for their computational efforts—which occurred back in April, the total Bitcoin reserves held by miners have plunged to a three-year low.
The data shown by Kaiko revealed that as of August 3, BTC miner reserves witnessed a notable plunge to roughly 1,510,300 BTC, marking a 2.4% decrease from the peak earlier in December 2020.
This reduction translates to an estimated value of $86 billion, accounting for about 8% of all BTC currently in circulation.
In its latest report citing Kiako, Bloomberg attributes this decline in the miner’s reserves to the increased sell-offs from the miners ahead of the recent halving. These sales have been primarily driven by the need to cover operational costs amidst reduced income from block rewards.
The report read:
“The main source of revenue for crypto-mining companies such as CleanSpark Inc. and Riot Platforms Inc. was dramatically reduced by the halving. The preprogrammed update slashed rewards the firms get from validating blockchain data, which is referred to as mining.“
Although it is worth noting that the network fees on the Bitcoin network saw a spike immediately after the halving, providing temporary relief, this was short-lived as it was quick to adjust back to lower levels, with average fees now at $1.2 as of today, down significantly from more than $120 seen in April post-halving.
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