Top Five Bitcoin Miners Hold onto BTC Despite Upcoming Halving and Soaring Profits
Summary:
Despite the upcoming Bitcoin halving that will cut supply issuance by 50%, the five largest Bitcoin mining companies are not offloading their Bitcoin holdings. According to Bitwise, these miners sold a total of approximately 2,000 BTC in Q1 2024, the lowest in two years. Despite the looming challenge of halving, Bitcoin miner revenue saw a 30% increase quarter-over-quarter, rising above $4.5 billion. Additionally, Marathon Digital emerged as the leading miner among the top five, producing more than 2,500 BTC in Q1 2024.
Despite the looming 50% reduction in Bitcoin's (BTC) supply issuance due to the impending halving, the quintet of leading Bitcoin mining companies are not offloading their Bitcoin holdings. During the initial quarter of 2024, these major miners' collective Bitcoin selling activities decreased to the lowest seen in two years, when only about 2,000 BTC were offloaded, as revealed in Bitwise's report released on April 10. This is a significant decline compared to the sales made in 2023's final quarter when over 7,000 BTC were sold by these companies. The last time such low sales were recorded was in 2022's first quarter.
As the 2024 Bitcoin halving draws closer, the reward for each Bitcoin block mined will decrease from the current 6.25 BTC to just 3.125 BTC, pressuring the bottom line for miners, especially given the surging Bitcoin hash rates. However, in spite of these challenges, revenues for Bitcoin miners surged by 30% quarter on quarter, rebounding from the dismal numbers seen at the end of 2022 to over $4.5 billion, as per Bitwise's estimation.
Acheron Trading's CEO, Laurent Benayoun, believes that the halving won't necessarily lead to a decrease in miner profits in US dollar terms. He explains that the decline in mining rewards might be offset by a corresponding surge in network fees. Yet, historical patterns show revenue from Bitcoin mining decreases following halvings, with revenues in the month following halvings in 2020 and 2016 dropping by 40% and over 51%, respectively.
Marathon Digital emerged as the leading miner among the top five, having mined over 2,500 BTC in 2024's first quarter, down from over 4,000 BTC mined in the last quarter of 2023. Marathon Digital, however, also incurred the highest mining cost of $22,249 per Bitcoin, in stark contrast to Cipher Mining's significantly lower average cost of $8,626 per Bitcoin in the same period. The average price of Bitcoin during the first quarter of 2024 hovered around $53,534.
Globally, Bitcoin miners collectively hold more than 700,000 BTC, representing 3.4% of the total Bitcoin supply. Data from Bitwise revealed that the lion's share of 57% (approximately 12 million) of the Bitcoin supply is held by individual investors.
Published At
4/17/2024 4:04:15 PM
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