At the end of last week, in just 24 hours, 14,000 bitcoins worth more than $300 million were transferred from wallets owned by miners to other accounts at the current rate, informed analytical company CryptoQuant.
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Over the past few weeks, miners have sold the most bitcoin since January 2021, according to CryptoQuant. This phenomenon, called “miner capitulation,” indicates that miners are selling off cryptocurrencies to cover ongoing mining costs and stay afloat. The sell-off was fueled by the fall in the price of bitcoin and rising energy costs, which reduced mining profits.
“Given the rise in the cost of electricity and the sharp fall in the price of bitcoin, the cost of mining bitcoin for some miners may be higher than its price,” — said Citi analyst Joseph Ayoub.
Core Scientific, one of the largest publicly traded cryptocurrency mining companies in the US, sold almost all of its bitcoin in June — 7,202 bitcoins at an average price of $23,000. CEO Mike Levitt explained to CNBC that, like any other business, bitcoin miners need to pay their bills, and this is done in dollars. He noted that bitcoin mining is still profitable – the margin is about 50% across the industry. At the peak of the bitcoin rate, this figure was 80%.
Levitt said that the money received from the sale of bitcoins was mainly used to expand the company’s activities, including the purchase of new ASIC blocks and additional data center capacity. The company used part of the money to pay off debts and pay employees to buy shares in the company.
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