How are those poor old miners going?
Well today we saw that Core Scientific unloaded 78.6% of their holdings, equivalent to 7.2k BTC. Given our recent coverage of miner capitulation this shouldn’t come as any surprise. Publicly traded miners expanded their operations, invested in more hardware via debt and equity at the top, and are now paying the price.
The Hash-Ribbons gave us an early warning, with the faster moving average inverting back on the 7-June. This indicated that hashrate was coming offline at a rapid pace, and indicated that miners were under notable income stress. Remember, prices were at $30k when this went off.
We also had the combined Difficulty Compression and Puell Multiple signalling implied and actual miner stress was afoot. These don’t fire off too often, but so when they do it is worth paying attention.
So now that we have miners actively becoming forced sellers, how much more could there be to unload? There is no perfect answer to this, and it is unlikely that ALL Bitcoin miners will liquidate everything. Some miners will have stronger balance sheets and capital management than others, so will not need to be so aggressive with sales.
Based on Miner balances that we track at Glassnode, there is around 63k BTC still held by miners. They have been distributing lately at a rate of around 4.8k BTC/month, which in the grand scheme of things, is small (LUNA was 80k in 2 days!)
This more or less backs up what is reported on balance sheets in public disclosures. Sam captures here that around 45.9k BTC remain in publicly traded miner treasuries, and if we assume that say 50% of it needs to be liquidated (worst case), that equates to around $459M of necessary inflows.
Not ideal, but also, this market has seen worse.
Bitcoin mining is a cutthroat and savage industry. The perfect example of capitalism. This is how free markets operate.
Be the best, or expect to go under.
Ruthless, but what a thing to watch.
My Mining Capitulation Dashboard:
https://studio.glassnode.com/dashboards/aec5d292-d140-42a9-4fd9-7c02cbc889bc