Key Points
- Bitcoin’s price plunge may be due to increased liquidation of miners’ holdings.
- Bitcoin miners’ earnings have soared over the last four months, despite a steep decline in holdings.
The cryptocurrency market saw a significant downturn as Bitcoin (BTC) dropped to a two-week low of $60.9k in the last 24 hours of trading.
Despite a recovery to $62k, the coin remained under heavy selling pressure, losing almost 15% of its value over the week.
Miners’ Holdings and Bitcoin’s Price
One contributing factor to this slump could be the increased liquidation of miners’ holdings.
Data shows that the amount of Bitcoins held in miner wallets has dropped to levels not seen in nearly three years.
Miners often liquidate their holdings to cover the costs of setting up mining infrastructure.
This can exert significant downward pressure on Bitcoin’s price, as miners are some of the largest holders of the asset.
Miners’ Earnings and Future Outlook
Despite the decline in holdings, miners’ earnings have seen a substantial increase over the last four months.
In fact, daily revenue, consisting of transaction fees and a fixed block subsidy of 6.25 BTCs, reached its second-highest level in history on March 7th.
However, with the upcoming halving set to reduce rewards to 3.125 coins per block, miners are likely raising funds to buy more cost-effective mining equipment to offset the expected revenue loss.
Another concern for miners is the falling fee revenue.
As of March 19th, transaction fees comprised just 4.45% of the total miner revenue for the day, a sharp drop from over 36% recorded in December.
