Miners Sell More Bitcoins Than Generate: Is It A Surrender?
ByteTree published a report according to which miners sold more coins in May than they generated during the same period. This indicator is quite significant: the difference between the generated blocks and the Bitcoins put up for sale on exchanges is 11%. This indicates that miners are launching their crypto assets stocks on the market.
A representative of ByteTree commented on this trend. He said that over 5,800 BTC were delivered over the past week, while 6,500 Bitcoins were sold. The expert also told how the withdrawal of coins from miners’ wallets occurs. When the newly generated coins fall into the wallet, they are designated as “first-use” coins, that is, coins that have not yet been put into use and therefore have not participated in transactions.
Accumulated coins are referred to as “generation”. The owner of this wallet can move these coins at any time, then they are “activated”. The expert added:
“Miners can sell generated coins at any convenient time. As a rule, they are forced to do this when it is urgently necessary to resolve the issue of the cost of hardware. The third halving of Bitcoin is precisely the catalyst for this problem. ”
Is this a surrender of miners?
Many crypto analysts disagree that miners capitulate and completely leave the big “cryptocurrency game” due to the inability to cover operating costs. Likely, weak miners are now looking for ways to reduce the cost of generating Bitcoins and have suspended their business for a while. Thomas Heller, director of global business at F2 Pool, is convinced of this.
In particular, he said that now many miners sell their equipment in those countries where electricity is very expensive. But this does not mean that they left the game. These miners change the location and install equipment where electricity is much cheaper.
“Miners sell equipment in countries such as China, the USA or Canada because of expensive electricity. They install mining equipment in countries with a relatively low price for electricity, such as Russia or Kazakhstan. This strategy may turn out to be winning and ultimately increase the profitability of mining.”
“Helping hand” from companies specializing in mining devices
It should not be denied that after the Bitcoin halving, the financial situation of the miners has changed a lot. So that miners can stay afloat and earn income, companies such as Bitmain and MicroBT have developed a line of innovative mining equipment that will be put up for sale within two months.