Key insights:
Bitcoin miners liquidated $485 million in BTC over a 12-day period ending Aug. 23.
Despite these sell-offs, Bitcoin’s network hashrate and fundamentals remain strong.
Bitcoin (BTC) surged back to the $112,000 level on Thursday, bouncing back from a six-week low just two days earlier. However, traders are still wary as miners have been selling coins at the fastest rate in nine months. This raises the question of whether it indicates the onset of deeper issues or if other factors are driving these outflows.
Data from Glassnode reveals consistent decreases in miner wallets from Aug. 11 to Aug. 23, with minimal signs of renewed accumulation since. The last period of regular withdrawals exceeding 500 BTC daily was on Dec. 28, 2024, after Bitcoin struggled to maintain levels above $97,000.
During the recent sell-off, miners offloaded 4,207 BTC, valued at about $485 million, within the 12-day timeframe ending Aug. 23. This follows a previous accumulation phase from April to July, where miners added 6,675 BTC to their holdings. Current miner balances total 63,736 BTC, worth over $7.1 billion.
While these movements are relatively minor compared to allocations from major firms like MicroStrategy (MSTR) and Metaplanet (MTPLF), they often incite market speculation and fear, uncertainty, and doubt (FUD). If miners experience tighter cash flow, there could be increased selling pressure unless profitability improves.
Over the last nine months, while Bitcoin has appreciated by 18%, miner profitability has diminished by 10%, based on HashRateIndex data. Rising mining difficulty and reduced demand for on-chain transactions have pressured margins. The Bitcoin network continues to adjust, aiming for a consistent block interval of 10 minutes, but profitability concerns persist.
The Bitcoin hashprice index currently sits at 54 PH/second, a drop from 59 PH/second a month ago. Nevertheless, miners have little to complain about: this metric has significantly improved from levels recorded in March. According to NiceHash data, even Bitmain’s S19 XP rigs from late 2022 remain profitable at $0.09 per kWh.
Bitcoin miners contend with AI competition yet stay robust
Some investor discontent arises from a notable shift towards artificial intelligence infrastructure. This narrative gained traction after TeraWulf (WULF) announced a $3.2 billion agreement with Google for a 14% equity stake. The capital is intended to expand TeraWulf’s AI data center in New York, expected to commence operations in the latter half of 2026.
Related: Bitcoin to reach $1.3M by 2035 as demand from institutions surges–Bitwise
Other miners are also making similar transitions. The Australian company Iren, previously known as Iris Energy, has expedited the acquisition of Nvidia GPUs and is developing a liquid-cooled AI data center in Texas, alongside a new facility in British Columbia expected to accommodate 20,000 GPUs. In addition, Hive, formerly Hive Blockchain, has allocated $30 million to enhance GPU-driven operations in Quebec.
Despite the excitement surrounding AI, the fundamentals of Bitcoin remain strong. The network hashrate is nearing an all-time high at 960 million TH/second, reflecting a 7% increase over the last three months. This robustness mitigates concerns about miners’ net outflows or the absence of profitability improvements across the industry.
There is no indication that miners are under immediate pressure to sell their holdings, and even if selling continues, inflows into corporate reserves can sufficiently offset the impact.
This article serves general informational purposes and is not intended as legal or investment advice. The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cointelegraph.
