According to a recent tweet by on-chain analytics platform Glassnode, Bitcoin miners have reached an unprecedented milestone in their revenue generation. The platform reported that there is currently an “extremely high exchange interaction” taking place, as Bitcoin miners have sent a record-breaking $128 million to cryptocurrency exchanges over the past week. This remarkable figure accounts for a staggering 315% of their daily revenue, as noted by the analytics platform.
Throughout the 2021 bull run, there were notable instances of spikes in miner revenue being sent to exchanges as miners sought to capitalize on their profits. Additionally, during late 2022, there was a significant influx of capitulation as the markets hit their cycle bottom. However, this latest surge in miner revenue surpasses all previous spikes by a substantial margin.
Typically, when miners transfer their Bitcoin profits to exchanges, it is done in preparation for cashing out to cover their expenses and secure their profits. The past week presented an opportune moment for such actions, as Bitcoin reached its highest price of the year thus far, touching $31,185 on June 24. CryptoQuant co-founder and CEO Ki Young Ju echoed this sentiment, stating that the current price-to-earnings ratio is favorable for miners to sell their holdings.
As of now, Bitcoin’s price has not been significantly affected, remaining slightly above the $30,000 threshold at the time of writing. Nevertheless, the $31,000 price zone represents a significant resistance level for BTC, with previous attempts in mid-April and late June failing to break through. If the bulls fail to establish new ground, potential losses may ensue, especially if miners begin liquidating their holdings.
While the profitability of Bitcoin mining, measured by hash price, has experienced a slight increase over the past week due to rising BTC prices, miners continue to face significant challenges. The current hash rate stands at approximately $0.076 TH/s (terahashes per second) per day, according to HashrateIndex. Despite Bitcoin’s price surging over 88% year-to-date, profitability has declined by over 30% since July of the previous year and has plummeted by more than 80% since the peak of the 2021 bull market.
When considering the near-record hash rates of 377 EH/s and peak difficulty levels, it becomes evident that Bitcoin miners are still grappling with an uphill battle. The increasing hash rates and difficulty, coupled with rising energy prices, exert downward pressure on mining profitability. Consequently, miners may find themselves reluctantly compelled to sell their hard-earned Bitcoin in order to cover expenses—a circumstance that may prove unfavorable but necessary.