Bitcoin Miner Reserves Plummet to 1.90M BTC, Hitting a 14-Year Low
Bitcoin miners are currently holding the smallest amount of BTC in over 14 years, with reserves falling to 1.90 million BTC as of June 19, 2024. This decline, which is the lowest since February 2010, reflects a trend of miners reducing their Bitcoin holdings.
Despite the decrease in Bitcoin reserves, the value of these holdings in fiat currency remains near an all-time high, at around $135 billion.
The decrease in miner reserves can be attributed to the Bitcoin halving event that took place on April 20, 2024. This event reduced mining rewards from 6.25 BTC to 3.125 BTC, significantly impacting the operations and rewards of miners.
However, the reduction in reserves has been relatively slow, resulting in minimal selling pressure on the market. Lucas Outumuro, head of research at IntoTheBlock, explained that the decrease in reserves has been offset by the increase in Bitcoin’s price, maintaining the high dollar value of the holdings.
While miners have reduced their Bitcoin holdings, the market capitalization of US-listed Bitcoin mining companies has surged. As of June 15, 2024, these companies reached a record market cap of $22.8 billion. Core Scientific, TeraWulf, and IREN were the top performers, with gains of 117%, 80%, and 70% respectively. Despite the rising stock prices, miner revenue and reserves have declined, reflecting the impact of the halving and market dynamics.
Glassnode’s analysis shows a steady decrease in Bitcoin miner balances in recent weeks, with reserves now at approximately 1.8 million BTC. This ongoing sell-off indicates a shift in miner strategy towards maintaining financial stability rather than accumulating Bitcoin in the long term.
Bitcoin miners are currently facing an extended sell-off period that has not been seen since 2017. Data analyzed by CryptoSlate’s lead analyst, James Van Stratten, shows that as of June 17, the Bitcoin market has been experiencing miner capitulation for 33 days. Historically, this capitulation period lasts around 41 days on average.
The primary reason for the miner capitulation is the Bitcoin halving in April, which reduced the block subsidy. Since then, the average daily revenue for miners has dropped from around 900 BTC to 450 BTC. Network fees, although a source of revenue, remain minimal.
Mining has become highly competitive, with only the most efficient operations able to maintain profitability. Even large, publicly traded mining firms are selling their coins as profit margins narrow.
On June 18, Bitcoin’s price dropped by 2%, reaching around $65,152. Currently, Bitcoin remains under pressure, hitting an intraday low of $64,700. This has intensified selling pressure, with hedge funds holding the lowest amount of Bitcoin since October 2020.
As a result of the price decline, the initial support level around $66,000 has now become a resistance level. Bitcoin is currently trading at around $65,660 but has been unable to break through this new resistance.