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Miners and long-term owners dump their bitcoin – Crypto News Current

According to an on-chain analysis by Glassnode Bitcoin-Miners continue at a loss as long-term holders sell at a loss.

The company estimates that industry players are still selling around 8000 BTC per month to cover their USD-denominated business expenses.

Miners in the red

As tweeted by Glassnode on Wednesday, miner balances have seen major drains since Bitcoin’s failed retest of $24,500 in August. The price pumped alongside Ethereum in anticipation of the merger, but since declined after the upgrade actually went live.

“This indicates aggregate miner profitability is still under some pressure as roughly $8,000 BTC/month is spent to cover USD-denominated costs,” the company explained.

The chart provided by the company shows that outflows on September 22 were higher than at any point in the past two years. The next highest outflows were in early 2021, also after a bitcoin price retracement.

Bitcoin miners earn a fixed amount of Bitcoin (6.25) each time they mine a block for the network. Successfully mining a block requires energy consumption and requires the use of highly specialized machines called ASICs to do the job profitably.

Machine and energy costs each represent an implicit cost of mining the coin. Therefore, staying profitable requires cheap access to both resources – alongside a well-functioning bitcoin market.

Therefore, Bitcoin miners were quickly forced to sell their coins as their profits in USD dropped significantly. In June, the public miner Core Scientific sold over 7000 BTC, leaving less than 2000 BTC on its balance sheet at this point.

Last week the Bitcoin mining-North Compute company filed for bankruptcy.

Long-term holders are capitulating

Meanwhile, it appears that even longtime Bitcoin holders are selling their coins at a loss.

According to Glassnode, profitability has fallen to levels last seen at the bottom of the 2018 bear market.

“Long-term holders are selling $BTC at an average loss of 42%, suggesting that issued LTH coins have a cost basis of around $32,000,” the company said.

Many high profile crypto investors including Raoul Pal and Mike Novogratz believe Bitcoin’s return to the bull market largely dictated by macroeconomic policies. However, many, including FTX CEO Sam Bankman Fried, have predicted that the worst of the crypto bear market is likely Already passed.

So far, Bitcoin surpassed most other financial assets besides the US dollar in Q3.

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Source: Crypto News Deutsch

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