Bitcoin (BTC) Miners Are Likely to Continue Selling Their Holdings Despite Decreasing Incentives and Network Fees

The most recent research from Kaiko Research indicates that forced selling by Bitcoin miners is likely to continue in the future despite the fact that incentives

Bitcoin miners have begun selling their holdings to cover the costs of their operations, according to recent research from Kaiko. Despite a decrease in incentives and network fees, the research predicts that miners will continue to be compelled to sell.

The research highlights a 90% decrease in Bitcoin network fees over the past six months. However, the fee has remained relatively high, dropping from $45 in January 2024 to an average of $3-$5 currently.

Following the Bitcoin halving, network fees briefly surged to $150 amid mass minting of non-fungible tokens (NFTs) on the Bitcoin blockchain. This provided temporary relief for miners before fees began trending lower again.

On the other hand, Bitcoin miners have faced increasing pressure due to a decrease in block rewards from 6.25 BTC pre-halving to 3.125 BTC post-halving. This pressure has been further exacerbated by rising costs associated with mining.

Despite the challenges, Bitcoin's price has remained relatively stagnant, exhibiting sideways consolidation and failing to provide any significant price appreciation. Additionally, traders and institutions have shown less optimism, evident in the substantial decline in inflows to spot Bitcoin exchange-traded funds (ETFs) compared to Q1.

With limited price stimulation from other sources, miners will be left with no choice but to sell more of their holdings, according to Coingape.

Among the notable developments, Marathon Digital reportedly sold 390 BTC in May, and the company intends to sell more BTC to stabilize its operations. If more miners follow suit, it could lead to further price drops for Bitcoin, with immediate support at $60,000 on the downside. A breach of this level may lead to further price declines toward $57,000 and $54,000.

In response to declining Bitcoin mining profitability, Marathon Digital and other miners have explored alternative avenues, such as mining other proof-of-work cryptocurrencies like Kaspa (KAS).

Kaiko also anticipates consolidation among miners as they seek to streamline operations and improve profitability. This trend is expected to continue given the ongoing impact of the Bitcoin halving on the industry.

For instance, Riot Blockchain's hostile bid to acquire Bitfarms highlights the consolidation efforts. Similarly, CleanSpark recently announced a $155 million all-stock acquisition of Griid Infrastructure.

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