Despite the largest ever migration of mining hardware, Bitcoin miners have seen an increase in BTC selling. In the last few weeks, Bitcoin mining hash power saw a sharp decline.
The recent on-chain weekly analysis by Glassnode reveals that two factors are responsible for the recent rise in Bitcoin miners’ selling pressure. A dramatic drop in mining revenue. A sharp rise in logistics expenses for Bitcoin miners who are moving.
Glassnode stated that the revenues of the mining market have fallen by approximately 65% compared to April 2021. Current mining revenues are approximately $20.73 million per hour.
“Over the same time, mining difficulty has only increased 23.6%. This is due to the worldwide shortage of semi-conductors, which has restricted miners’ ability to expand operations. This means that Bitcoin mining has been extremely profitable through 2021, and that certain mining hardware, which would otherwise be outdated, is still profitable. According to Glassnode, this means that fewer coins must be sold in order to pay costs and that miner treasury can be increased.”
Institutional demand for Bitcoin
Glassnode’s latest report highlighted a significant decrease in institutional demand. In the past few weeks, BTC-related investments products experienced significant outflows. The first week of June 2021 saw significant outflows in Bitcoin investment products. This was the highest weekly total ever recorded. The narrative as well as the reality of institutional demand was the primary driver of Bitcoin’s price appreciation in 2020-2021. Grayscale’s GBTC trust account was a major factor in this. This fund allowed traders to arbitrage the premium that had been observed in 2020 and 2021. The report said that the GBTC product trades at a persistent discount against NAV since February 2021, with the highest discount being -21.23% in May.
Grayscale remains one of the largest institutional Bitcoin holders. Grayscale, a US-based asset manager, has over 650,000 BTC under its management.