Researcher Says More Digital Coins Are Being Sold Than Mined
Watch what the Bitcoin miners are doing during this rise. The Bitcoin (BTC) bulls may want to pay more attention to the miners.
The most important mining companies, in the last 24 hours, sold more coins than they extracted. This, according to data from Cryptocomposite.com, a provider of analysis that will soon release more details. According to the report, the miners sold $17.3 million of coins, while earning about $14.4 million.
While miners often sell freshly minted coins to meet operating costs, such as electricity for the operation of their networks, some community members say that the magnitude of sales could mean that miners do not expect BTC to continue to appreciate.
BTC has risen 40 percent since the beginning of the month, to over $8,000 on Tuesday for the first time since May.
“Historically, many miners didn’t sell 100 percent of their coins, and were waiting for the price to appreciate,” Kyle Samani, managing partner at Multicoin Capital Management, said in an email. “I suspect many of them are selling now.”
Miners Often Sell New Coins To Cover Operating Expenses
In recent days, crypto miners have sold about $10 million dollars in inventory, which is less than their daily earnings, according to Charlie Morris, who is part of the team that develops Cryptocomposite.com. Morris manages up to $300 million dollars in assets for the London-based Newscape Capital Group.
Despite the recent upturn, miners have seen margins fall since prices peaked at nearly $20,000 in December. As prices remained below $8,000, many miners margins narrowed to the point where they were selling all their newly earned coins to cover expenses, and some miners left the market, according to analysis provider Coinmetrics.
“I’d expect that at these relatively low price levels, miners are selling off all of their new takings – they can’t afford not to,” Nic Carter, co-founder of Coinmetrics, said in an email.
Some companies including AMD and Nvidia have been selling an important number of GPUs due to the increased demand from miners. But, unfortunately for them, the demand decrease after Bitcoin dropped around 65% since its all time high.