Bitcoin is still holding steady above the $60,000 price mark, but recent actions by miners could disturb this stability very soon. The recent halving cut the block reward from 6.25 BTC to 3.125 BTC, meaning miners now receive half as much for verifying transactions and mining new blocks. As noted in a recent report by Kaiko, miner revenues have plummeted since the halving, and miners are beginning to feel the pressure.
Bitcoin Under Increased Pressure
Bitcoin miners largely rely on two revenue streams to keep operating: the mining reward and transaction fees. The Bitcoin market is cyclical and each halving has historically led to an increase in selling pressure from the miners. Data shows that the recent April halving has led to a fall in the Bitcoin hash rate with mining profitability now at its lowest point in three years.
For miners with high operating costs, this drastic mining pay cut means they have to find other ways to generate income and fund their business. For many, the only option is to sell some of the BTC they hold. According to findings, Marathon Digital and Riot Platforms, two of the biggest Bitcoin miners, currently hold BTC worth over $1.6 billion between them.
Interestingly, the spike in Bitcoin network fees before and after the halving has mostly offset operational costs and compelled the need to sell. According to Kaiko, network fees accounted for 16% of BTC earned by Marathon Digital in April, a jump from 4.5% in March.
However, the recent trading activity and volume decline in the past few days means revenue from the network fees is dropping and the likelihood of miners selling their holdings is increasing.
What’s Next For BTC?
At the time of writing, Bitcoin is trading at $61,888 and is on a 1.20% decrease in the past 24 hours. The next three to six months will be crucial in determining how much the halving and miner selling impacts the Bitcoin price. If demand remains strong and most large miners can weather the revenue drop without selling too many of their holdings, the price could hold steady and even start to climb.
Fortunately, there are still a lot of catalysts for price surges that could offset the looming selloff from miners. Hence, Bitcoin has a good chance of defending the $60,000 price level. An example is the mainstream adoption of BTC through Spot Bitcoin ETFs. Some Bitcoin whales are also taking advantage of the price consolidation to top up their holdings. On-chain data shows that short-term holder whales are now accumulating around 200,000 BTC per week.