According to information provided by researcher Kaiko, Bitcoin miners are facing increasing pressure as they struggle with low token rewards, which has significant impacts on market liquidity and trading activity.
A significant portion of Bitcoin mining revenue has been experiencing a significant decline recently following the halving at the end of April.
This event, known as the halving, occurs approximately every four years and reduces mining rewards by half.
The latest halving, the fourth since 2012, reduced daily production from 900 tokens to 450, resulting in a loss of annual revenue of approximately $10 billion based on then-current prices.
In response to this revenue decline, Bitcoin miners have attempted to offset their losses by taking advantage of transaction fees, an alternative revenue stream beyond the mining subsidy.
However, due in part to the introduction of memecoins on the Bitcoin network, the post-halving surge in transaction fees has since subsided, contributing to further revenue problems for miners.
Kaiko's analysis suggests that potential selling pressure from miners, especially those with significant Bitcoin reserves, could have a negative impact on cryptocurrency markets.
This scenario is further complicated by the seasonal slowdown in trading activity and liquidity, which is usually observed during the summer months.
Despite the recent revenue decline, Bitcoin miners have tended to hold on to their reserves, unlike the sell-offs observed during the 2022 crypto market downturn.
Over the past two years, major Bitcoin mining companies such as Marathon Digital and Riot Blockchain have increased their holdings, demonstrating renewed confidence in the digital asset market.
According to Kaiko's data, Marathon reportedly owns 17,631 Bitcoins worth over $1.1 billion, while Riot owns 8,872 Bitcoins worth over $500 million.
*This is not investment advice.