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BTC miners offload reserves as crypto prices fall

By Daniela Ešnerová

08:24, 10 June 2022

A BTC mine in action
BTC miners offload reserves as crypto prices fall - Photo: Shutterstock

Bitcoin miners are selling their bitcoin reserves to plug the gap from falling revenues and rising production costs. How are bitcoin miners bearing the bear market?

At the top of the market in November 2021, bitcoin miners were rewarded $68,000 for each coin (BTC) they produced but the price has fallen to about $30,000.

Bitcoin to US dollar 

Miner revenues are down 56% from all-time high, on-chain data from on-chain analytics firm Glassnode show, and the companies are selling their BTC to make up for it. 

Canadian Riot Blockchain (RIOT) - which made $213.2m in 2021 - a whopping 1,665% increase year-on-year, had to liquidate its BTC position last month.

Meanwhile, Bitfarms (BFIT) scaled its growth plans and Stronghold Digital (SDIG) missed its 2022 revenue estimates.

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Cutting BTC reserves 

Bitcoin miners are proverbial HODLers, and kept their hands ‘diamond’ during bear markets. 

But not anymore. Miner balances are now in decline and miners are selling BTC more than adding it, data from Glassnode show.

“Since 2019, we’ve seen predominantly miners adding to their balance,” Glassnode analyst Checkmate says in a recent video update.

LUNA crashes to Earth 

Following the LUNA sell-off, there has been net distribution, according to Glassnode figures of up to 6,000 BTC.

“[Miners] are essentially having to sell their accumulated reserves to cover their costs because their incomes are no longer providing the same that they were before. 

“They have to sell more in order to recuperate the same US dollar value or fiat value depending on where they are,”  Checkmatehe says.

Euro /US dollar 

The bitcoin mining sector may be in a worse state than the cryptocurrency market itself, says Stifel analyst Suthan Sukumar, who says miners are facing difficult market conditions ahead.

“Across publicly traded crypto miners, a key emerging theme is challenges from supply chain uncertainty, tougher access to capital, and rising power costs.”

"Rough road ahead" for BTC miners

Sukumar points to SDIG and BITF cutting their full-year targets and says this is indicative of a rough road ahead for miners.

“Looking ahead, the market volatility and risk-off sentiment continues, with our names down nearly 2x of bitcoin itself year-to-date,” he added. 


3,515.68 Price
+2.860% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


170.48 Price
+7.260% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652


0.58 Price
+1.380% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


67,200.80 Price
+5.350% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

While talk of a crypto winter may be premature some tokens, such as solana, have suffered major falls from their all-time-highs in 2022.

SOL to US dollar 

Bear market strategies 

According to Checkmate, miners offloading their inventories during a downturn is to be expected given the cyclicality of the sector.

“Historically, miners invest more capital [during bull marketsmarket]; they buy more hardware, more facilities, and logistics,” the analyst says.

“The challenge is that once that equipment starts to turn on, difficulty rises and so does the cost of production - it’s harder to mine every individual bitcoin.

Majority of BTC already mined 

With over 19 million of Bitcoin’s hardcap of 21 million tokens already minded Checkmate says future market conditions for miners will be challenging.

“Bitcoin protocol will continue to change the difficulty so that we can’t. So it will continue to make the puzzle harder and harder and harder. 

“Even though miners are spending more money on their new hardware, new power, they’ve got new operations and they’ve got new capital overheads.

“So miners invest at the end of the cycle typically, and then they have to weather the bear market with increased costs but falling revenues.” 

Mining economics “remains healthy”

Sukumar says that despite the current mood in the sector, things can pick up and mining BTC still makes economic sense at current prices - he estimates breakeven costs for miners range from $5000 to $15,000.: 

BTC mining is famously energy intensive and despite the war in Ukraine driving up global oil and gas prices - and in turn energy costs, they would need to climb a lot higher to threaten miners margins at bitcoin’s current price. 

US Crude Oil Spot

"We see well-capitalized miners as well-positioned to execute on existing growth plans. 

Our top picks remainremains HUT and HIVE,” says Sukumar.

Markets in this article

Bitfarms Ltd.
2.8046 USD
0.13 +4.900%
Bitcoin / USD
67200.80 USD
3412.8 +5.350%
1.08860 USD
-0.00114 -0.100%
Hut 8 Corp.
19.5604 USD
1.39 +7.680%
Riot Blockchain, Inc.
12.06 USD
1.09 +10.010%

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