As the crypto dump worsened in June, Arcane predicted that bitcoin miners have sold even more bitcoins in June.
Digital assets-focused firm Arcane’s latest research on bitcoin miners indicates that public-traded companies sold 100% of their mined coins in May due to declined profit margins and volatile market conditions. The selling rate drastically jumped from roughly 30% in the first four months of 2022.During the bull market, publicly-traded bitcoin miners tended to keep most of their mined coins when the landscape was in a sanguine state.
This phenomenon pushed down the profit margins as miners were required to deploy more computational power to gain equivalent outputs as they had in the past. Despite the advantages of accessing cheap electricity and energy-efficient machines, some miners still struggled to create net cash flow for their mining businesses as bitcoin’s nosedive showed no apparent respite:
“The increasing hashrate and the falling bitcoin price have pushed the mining profitability down to levels not seen since 2020. At $40 per MWh, the energy-efficient Antminer S19 currently yields a cash flow per bitcoin of $13k, corresponding to an 80% decline from the November 2021 peak. The Antminer S9, our proxy for old generation machines, is now cash-flow negative.”It’s worth noting that many publicly-traded miners could easily raise capital when the broader equity market remains bullish.
Given the asset’s price plunging harshly, which brought down the value of mining machines, many miners had to sell their monthly output in order to pay off their debts and cover operational expenses. Companies running out of dry powders may even fall into financial difficulties. The researchMiners have several options to finance their operations without selling bitcoin, for example, issuing equity or raising debt with their machines or bitcoin holdings as collateral.
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