Bitcoin (BTC)CryptocurrencyPrice Analysis

Deepening Crypto Winter Has Bitcoin (BTC) Miners Fighting for Survival

  • Public Bitcoin mining firms are still offloading their holdings.
  • Those with lower debts and production costs will likely endure.
  • Most companies will have to sell their mining hardware.

BTC miners have been selling their stashes for the past few months. MacroHive data shows exchange inflows increased steadily amidst such developments. That added to Bitcoin’s downward pressure, contributing to the 74% drop from its ATH to beneath $18K on 19 June.

Arcane Research confirmed that various public mining firms sold their entire output during May’s sessions. Jaran Mellerud of Arcane stated that June worsened the case, meaning more potential selling by miners. That is according to reports by Reuters.

Blockware Solutions analyst Joe Burnet said miners experienced worse conditions within the last six months. Hash rate and difficulty have surged with the soaring energy prices, whereas Bitcoin prices plunged within the timeframe. Burnet trusts these are negative narratives for existing miners looking to compress margins.

Multiple publicly listed mining companies, including Core Scientific (CORZ), Riot Blockchain (RIOT), and Bitfarms (BITF), have already declared sales, whereas Marathon Digital (MARA) hasn’t offloaded any.

Only the Fittest to Survive

Mellerud revealed his research on miners’ balance sheets and cash flows on 27 June, evaluating firms that will likely get through the cryptocurrency winter. Direct Bitcoin production costs affect miners’ cash flows, determining when miners should close their shops.

He added that Argo and Stronghold boasted the lowest direct BTC production costs, whereas Hut 8 and Bitfarms have the highest. Firms with more significant cash flows, like Riot and Core Scientific, are well-positioned to pay incoming costs, like machine deliveries and debts.

BTC Market Bottom

The drop beneath $18K early this month was the first in any bear market than BTC plunged under its previous cycle’s high. For now, BTC trades beneath vital technical indicators, which might mean markets are nearing the bottom. Glassnode analysts stated that BTC was hovering beneath several models early this week.

Markets might be approaching the bottom, but failure to respect previous cycles might see prices hovering there for some period, especially with macro-economic conditions taking time to improve.

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