Bitcoin miners sell their BTC holdings amid market weakness

Bitcoin miners sell their BTC holdings amid market weakness

When the bitcoin price falls, companies are forced to shut down their facilities or sell their assets.

Bitcoin (BTC) mining companies are selling their tokens as the cryptocurrency's falling price erodes profit margins and capital markets are less friendly.

Read this article in Spanish.

Miners' shipments to exchanges have reached their highest level since January, Compass Mining, a bitcoin mining services provider, wrote in a research report based on data from CoinMetrics. "Miners may start selling their bitcoin holdings on the open market," Compass wrote. "At the very least, they are feeling the pain of the last big price drop. Combine that with a downward correction in difficulty - suggesting miners are shutting down - and it appears miners' profitability could take a hit."

Mining Bitcoin has become increasingly unprofitable as the cryptocurrency's price has trended lower. Popular machines such as Bitmain's Antminer S9 are losing money at electricity prices of $0.06 per kilowatt hour.

Miners who prefer not to shut down their machines may try to raise capital in the debt or equity markets and/or sell their Bitcoin holdings.

Argo Blockchain (ARBK) plans to raise debt and sell some of its bitcoin to cover costs, the company said on a first-quarter earnings call with analysts. Core Scientific (CORZ), the world's largest mining company by hashrate, has already sold some of its mined Bitcoins this year and plans to continue doing so.

The former Hodler Riot Blockchain (RIOT) sold nearly half of its mined Bitcoins in April after shedding a significant amount in March.

In a May 30 statement, Cathedra Bitcoin said it sold 235 bitcoins this month to increase liquidity and hedge against another price drop. The company also had a difficult April, achieving only 45% of its expected hashrate for the entire month due to storms that affected its North Dakota site.

Then there's Marathon Digital (MARA), which hinted in its early May earnings release that it might sell some of its bitcoin holdings.

The latest hint comes from Toronto-based Digihost, which announced Wednesday that it has sold some of its mined Bitcoins to cover energy costs.

This article was translated by Marina Lammertyn.