Bitcoin (BTC) has seen a sharp rise since October 2023. One of the reasons could be the upcoming halving of the Bitcoin network.
It looks like Bitcoin miners are preparing for this event by selling their reserves en masse, FRNT Financial reports.
Bitcoin bull market before halving
It is estimated that the next Bitcoin halving will take place in April this year. During this event, miners’ earnings will be halved.
From this moment on, miners will no longer receive 6.25 BTC, but only 3.125 BTC per block mined. This essentially makes mining twice as expensive.
This means that the price of Bitcoin must increase for mining to remain profitable. This is probably one of the reasons why the Bitcoin price is currently rising so quickly. It will be a so-called Bull market before halving called.
The spot Bitcoin ETFs recently approved in the US are also likely to play a role in the sharply rising price.
Bitcoin miners are releasing massive amounts of BTC
Bitcoin miners are taking advantage of the price increase to lock in their profits. In October, when the price of Bitcoin began to rise, they collectively owned about 1.83 million BTC, reports FRNT Financial, an institutional capital markets platform.
Since then, miners have sold 17,443 BTC. In the first two months of 2024, 8,426 BTC worth around $530 million have already been sold. FRNT Financial cites data from Glassnode for this.
This causes total Bitcoin miner ownership to reach its lowest level since the summer of 2021, when this year’s bull market took a short break.
Bitcoin miners are preparing for the upcoming halving
According to FRNT Financial, miners are preparing for the halving by selling their BTC. They may do this not only to pocket their winnings, but also to use the winnings for new equipment.
New mining devices can mine Bitcoin more efficiently and at a lower cost.
“Miners may also consider selling to better prepare for the halving. “This could mean that they are buying more efficient mining equipment due to the new economic conditions that the halving will bring,” said FRNT Financial.
Still, there are concerns that not all Bitcoin mining companies will survive the halving.