Bitcoin (BTC) miners are selling off their stocks and shares after mining profitability plummeted since November.
With Bitcoin currently at around $43,500, 33% below its all-time high (ATH) of around $69,000, miners are selling at the wrong time. However, electricity and equipment bills must be paid.
Data from chain analytics firm Glassnode shows that bitcoin miners have become net sellers after being net sellers for several months.
Since November 9, mining returns of 1 BTC have fallen by an average of 50.5% for the two most popular mining units, Antminer S9 and S19, according to blockchain research firm Arcane Research. This means that the ROI has fallen faster than the price of BTC.
The significant increase in the hash rate contributed to the decline in mining profitability. The competition among miners increases in proportion to the hash rate because it means that more machines are turned on to compete to find the next block.
On Sunday, Cointelegraph reported that Bitcoin has reached a new ATH in hash rate. This feat was achieved by jumping from 188.4 exahs per second (EC/s) to 284.11 EX/s in one day. The hash rate is currently around 232.19 EH/s at the time of writing, according to YCharts.
Some large mining companies have chosen to raise cash or pay bills by selling shares instead of cryptocurrency. On Friday, a spokesperson for Marathon Digital Holdings (MARA) told Bloomberg, “We started walking in October 2020 and haven’t sold a single satoshi since then.”
Instead, Marathon contacted the US Securities and Exchange Commission with a request to sell $750 million in shares and securities. Alpha Research said that Marathon intends to use a “large portion” to purchase equipment and general purposes.
MARA is currently down 0.56% and is worth $28.24 in the secondary market.
See also: Russian Ministry Wants to Legalize Bitcoin Mining in Some Regions
Analyst at an asset management company d. On Monday, Davidson told Bloomberg that miners have ideological and commercial reasons for their reluctance to sell bitcoin:
Big miners are more likely to sell shares because their shareholders want them to keep their bitcoin and not even think about selling it.