Bitcoin miners show signs of surrender as they sell rapidly bringing reserves to their lowest level in 2 years

Bitcoin mining is a fiercely competitive and costly venture that relies heavily on the fluctuations in the price of the leading cryptocurrency. During extended periods of bearish trends or consolidation, miners often find themselves struggling to stay afloat, leading some to give up on mining altogether. Current data from MacroMicro reveals that the average cost of mining one Bitcoin stands at $83,668.

Additionally, researchers at CryptoQuant have identified two key indicators of miner capitulation this week, painting a grim picture for the industry. Julio Moreno noticed a significant increase in daily miner selling volume, with 1,200 BTC sold over the counter, indicating a shift away from crypto exchanges. Meanwhile, Ki Young Ju pointed out that Bitcoin’s hashrate has broken an 18-month uptrend, signaling weakness in the mining sector.

In a related development, Santiment’s Sanbase Pro data shows that Bitcoin miners’ reserves have plummeted to levels last seen in June 2022, when Bitcoin was priced below $20,000. Currently, miners hold 1.8 million BTC while the price hovers around $66,800, a stark contrast to the 2.01 million BTC held before the all-time high in March.

Bitcoin mining is predominantly driven by economies of scale, with larger players reaping higher rewards from the network. In contrast, medium and small miners may struggle to remain profitable and could be forced to exit the market by selling off their reserves or mining equipment. This trend could ultimately lead to increased centralization within the industry, as larger entities consolidate their power, as reported by Finbold.