- Bitcoin miners suffer losses as their reserves drop to a 12-year low making it uniform with 2010 figures.
- Miners’ share of bitcoin in circulation remains under the 10% mark, a shadow of the good days of BTC mining.
- Experts blame the bear market that has seen the price of BTC fall more than 55% with no clear end in sight.
Bitcoin mining reserves have been a shadow of themselves in recent months due to unsavoury market conditions plaguing the virtual currency industry.
Mining reserves held by Bitcoin (BTC) miners have dropped to new lows not recorded in the last ten years. According to blockchain analytics firm IntoTheBlock, Bitcoin reserves have dropped to 1.91 million, competing with figures from 2010.
BTC mining reserves have been above the 2 million mark since Feb 2020, dropped below the threshold earlier this year, and have not recovered significantly since then. As the bear market worsened in mid-June, Bitcoin miners have had their share of woes selling more BTC than they mine in a month.
Last year, BTC miners suffered a similar fate following the Chinese government’s crackdown on mining activities, but the figure bounced back with mining migration and a steady market. The data gathered by IntoTheBlock shows that the cryptocurrency market has suffered a major hit this year as most coins have lost huge volumes. BTC miners have had to sell their reserve bitcoins to level profits which have dwindled over time.
IntoTheBlock published this data on Wednesday, explaining that it uses a machine-learning algorithm to single out miner wallet addresses. It further tracks their BTC holdings, and the aggregate assets in all wallets make up the reserves. It also follows the holdings of mining pools as they have reserves that are not used actively in mining.
The losses run deep
As major coins continue to lose value, small-scale miners and big mining firms are not left out. Firms like CleanSpark and Argo, which secured loans of $35 million and $97 million, respectively, against their equipment, have recorded losses in recent months depicting the grim state of the market.
Last month, Compass Mining shut down its Georgian operations with Poolin freezing withdrawals. The situation gets tougher as Iris Energy sold $100 million in equity to raise funds with Compute North filing for bankruptcy. As the downturn continues, analysts say that energy-efficient mining farms will help mitigate some losses. However, the broader market performance is still the leading cause of woes for BTC miners.