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Publically listed Bitcoin miners have almost entirely sold the Bitcoin that has been mined this year, sparking questions into the possible challenge this might have presented for the leading cryptocurrencies.
Earlier this week, blockchain analyst Tom Dunleavy from Messari posted research into the Bitcoin miner activity. In the data, nearly all of the Bitcoin mined during 2022 by ten major mining accounts including Bitfarms, HIVE, Argo, Iris Energy and Bit Digital has been sold. Dunleavy suspects that the selling of freshly mined Bitcoin could put pressure on the price of Bitcoin overall, pointing to a bullish Ethereum to Bitcoin trade, but a “persistent headwind” for Bitcoin itself.
Dunleavy believes that miners consistently selling off newly produced Bitcoin places downward pressure on the price of the leading cryptocurrency.
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
Bitcoin mining firms have also been selling older Bitcoin stock in the last six months, with uncertainty and distrust in the industry following the crash of FTX.
Despite the bullish outlook, the selling pressure from mining activity might not be as strong as it appears. According to Arthur Hayes, the former CEO of crypto exchange BitMEX, the increased sales of Bitcoin miners has insignificant selling pressure in the general market. In a report, Hayes noted:
“[We] can ignore this ongoing selling pressure, as it is easily absorbed by the markets… I believe that the forced selling of Bitcoin by CELs and miners is over. If you had to sell, you would have already done so… There is no reason why you would hold on if you had an urgent need for fiat to remain a going concern. Given that almost every major CEL has either ceased withdrawals (pointing to insolvency at best) or gone bankrupt, there are no more miner loans or collateral to be liquidated.”