June 28, 2022
Cryptocurrency is doing so bad right now that even some of the quintessential “HODLers” are selling.
Bitcoin miners have been unloading their Bitcoin holdings over the past two months as the cryptocurrency markets plummet and Bitcoin declines in value, according to a new report from Reuters.
In an unusual trend throughout May, Bitcoin miners actually sold more Bitcoin than they obtained through mining, according to the digital asset analysis firm Arcane Research.
For comparison, in the previous month, miners only sold off around 20 percent of the Bitcoin that they were able to mine, and the rest of their rewards were typically held in hopes of higher eventual profits as Bitcoin’s value soared.
At current Bitcoin prices (trading at approximately $21,000 at publishing), that means the reward drops from $136,500 to $65,625 in 2024.
But as crypto has tanked over the past few months, things have gone in a different direction, forcing some Bitcoin miners to sell-off their holdings if they don’t want to shut down.
Bitcoin mining maintains the cryptocurrency’s digital ledger, known as the blockchain, by validating transactions inside of a block and adding it to the chain.
The process to validate the transaction has often been explained as computers solving advanced mathematical equations, but it’s really more like complicated guesswork.
When a block is added, miners are rewarded with Bitcoins.
So, like everyone else right now, even Bitcoin miners have to tighten their belts.
As profits decline, competition may very well dry up, making it easier for the miners who stick around to earn rewards.
But the Bitcoin mining business isn’t going anywhere just yet.
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