🌎 Bitcoin Miners Optimistic Post-Halving, Hold Onto BTC Reserves

Industry experts have expressed optimism about the cryptocurrency sector and Bitcoin’s price performance post-halving. Bitcoin mining has been under scrutiny since the latest halving event in April. Typically, post-halving periods reduce mining rewards, affecting miners’ profitability. However, several insiders suggest that Bitcoin miners are optimistic about the current market outlook.

According to Sascha Grumbach, founder and CEO of Green Mining DAO, miners expect a post-halving Bitcoin price rally, historically occurring “within three to six months after each halving event.” Despite expectations that miners might sell their holdings to sustain operations post-halving, a surprising trend has emerged. Major mining firms have been holding onto most of their Bitcoin, according to Bitwise’s Q2 report.

In the first quarter of 2024, the five largest Bitcoin mining firms sold approximately 2,000 BTC, the lowest in two years, compared to over 7,000 BTC in the fourth quarter of 2023. This trend persisted and even intensified as June approached, with little to no selling activity.

Optimism among miners is also fueled by institutional interest following the introduction of exchange-traded products for Bitcoin in the United States, which have accumulated $17.71 billion as of July 29. Grumbach commented, “Institutional investments are seen as a validation of Bitcoin’s value and potential, leading to increased demand and price stability. Miners, recognizing this trend, prefer to accumulate rather than sell, anticipating a more favorable market environment in the near future.”

Jonathan Hargreaves, global head of business development & ESG at Elastos, observed a similar sentiment among his contacts in the mining sector. “Our merge miners and mining contacts are all expressing a strong belief that the market is about to experience a significant upward surge. As a result, they’re all holding onto their positions until the market makes its move.”

However, smaller miners face different challenges. The increasing mining difficulty mandates hardware upgrades to improve efficiency and profitability. As a result, smaller miners have had to sell portions of their Bitcoin holdings to stay afloat. CryptoQuant’s head of research, Julio Moreno, highlighted this trend, noting that since the halving, smaller miners are the ones selling while larger miners have accumulated.

Some miners even ceased operations post-halving due to increasing operational costs. Andy Fajar Handika, CEO and co-founder of Loka Mining, noted this phenomenon was mainly observed among newer mining companies that “didn’t prepare for the high volatility post-halving.” The taxing market conditions have also pushed some miners towards less competitive alternative markets, such as artificial intelligence, where they could leverage their existing infrastructure.

Despite these challenges, the situation seems to be improving as July comes to an end. According to a Bitfinex Alpha report, Bitcoin miners have returned to profitability for the first time since the halving. This shift indicates that miners who survived the post-halving stress have moved on to newer, more efficient machines, thereby boosting their profit margin.

The Bitcoin mining hashrate, which slumped to levels last seen during the 2021 China mining ban, was also improving, according to Matrixport. Additionally, President Donald Trump’s plans to add BTC as a national reserve asset and calls for the United States to lead global Bitcoin production act as bullish catalysts for the mining industry.

Firms like Marathon Digital Holdings have started strengthening their reserves, adding $100 million worth of Bitcoin to their stash in late July, demonstrating confidence in the market’s stability. Other top miners have also held onto their Bitcoin reserves, showcasing a broader pattern of asset accumulation among the top players. For example, mining firm Riot has not sold any Bitcoin since January, while CleanSpark has only offloaded small portions of its holdings.

Handika predicted that miners will continue to accumulate and expects “limited selling pressure” near Bitcoin’s next all-time high. Hargreaves added that selling pressure would likely be around the $125,000 per Bitcoin mark, when miners might start “dollar-cost averaging” into profits. This could happen either by the end of this year or extend into 2025, depending on the speed of price growth.

Grumbach also pointed out that Bitcoin’s recent trading volume dwarfs the output from new mining, making it relatively insignificant. As such, he doesn’t expect any selling pressure from miners in the short term.