The crippling crypto market and the current bear market are also affecting the crypto mining sector as public Bitcoin miners are shutting down their machines. Public Bitcoin miners have been reported to have sold almost all their Bitcoins mined in 2022.
A senior research Analyst at Messari crypto firm, Tom Dunleavy announced on Twitter that the Bitcoin miners had sold nearly all the coins they produced in 2022. According to his analysis, the top 10 Bitcoin miners have sold approximately 40,300 mined Bitcoin from the 40,700 made this year.
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
Dunleavy also noted that the BTC sell-off contributes to a strong case for being bullish on the ETH/BTC ratio trade, implying that Ethereum may outperform Bitcoin in terms of price.
The decision to sell mined Bitcoins was influenced by several factors, including the high cost of electricity, which has eaten into miners’ profits, the difficulty of mining a Bitcoin block, and the crypto meltdown that began with the collapse of Terra.
Another significant factor in the cessation of mining activities is the bankruptcy of the FTX exchange, which caused investor panic and overall unrest in the cryptocurrency market.
Mining Firms Shutdown Operations Amid Difficulty
A major Bitcoin miner, Core Scientific announced earlier in the month that it is filing for bankruptcy protection due to the low prices of Bitcoin and the current crypto bear market. Core Scientific stated that it still has a positive balance sheet.
The Bitcoin miner, however, stated that its positive cash flow is not enough to pay its electricity bills and mining equipment. The firm said its stocks were down by 77% at the time.
In October, Argo Blockchain, one of the world’s leading crypto miners revealed that the company is on the verge of experiencing a negative financial cash flow, which could result in the company ceasing operations in the near future if a proposed deal fails.
Argo previously signed a non-binding agreement with an investor to invest approximately £24 million ($27 million) in its shares via subscription, but the company no longer believes that the previously announced subscription will be fulfilled.
Argo stated that the net proceeds of the Subscription were intended to be used for working capital and other general corporate purposes, including capital expenditures related to the ongoing construction of Argo Blockchain’s flagship Helios facility in Dickens County, Texas
