Declining Reserves of Bitcoin Miners Post-Halving
Companies that profit by verifying transactions on the blockchain are witnessing a significant depletion of their reserves. In the wake of the Bitcoin halving, miners are struggling to remain afloat.
Bitcoin Holdings Dwindle
According to a report from the cryptocurrency research platform Kaiko, the total amount of Bitcoin held by miners has decreased to approximately 1,510,300 BTC as of August 3rd. This reduction in miner reserves signals a potential increase in volatility in the crypto market.
Impact of Halving on Miners
A report by Bloomberg highlights that the quantity of Bitcoin held in reserve by miners has reached its lowest level in three years following the halving event that occurred in April. The total BTC held by miners has diminished by 2.4% compared to the record high seen in December 2020. Presently, miners possess around $86 billion worth of Bitcoin, representing 8% of the current Bitcoin supply.
Sales and Financial Struggles
Data indicates that miners began liquidating their Bitcoin reserves towards the end of 2023 and continued to sell leading up to the halving in 2024. The revenue generated from these sales is primarily used to cover operational expenses. With the halving event resulting in reduced block rewards, miners are receiving less Bitcoin than before, prompting many to deplete their inventories.
Major Mining Firms Affected
Large mining firms such as CleanSpark and Riot Platforms have seen their sources of income cut in half. While the surge in transaction fees post-halving provided some relief, this benefit was short-lived. Average transaction fees plummeted from $143 to just $2 following the halving.
Core Scientific’s Financial Losses
In an announcement made on Wednesday, Core Scientific reported a staggering $804 million loss in the second quarter, reflecting the challenging landscape that miners are currently navigating.
