According to the latest weekly report from Kaiko, a cryptocurrency research company, the pressure on Bitcoin mining companies to sell BTC has significantly increased due to the completion of the fourth halving of Bitcoin block mining rewards and the continuous decline in transaction fees after the Rune hype.
We know that Bitcoin miners primarily rely on two sources of income: mining rewards and transaction fees. The completion of the fourth Bitcoin halving last month halved the block rewards for miners from 6.25 BTC to 3.125 BTC. Miners must rely on the increase in transaction fees and the price of Bitcoin to offset the high mining costs and avoid the need to sell Bitcoin. However, since the halving, the price of Bitcoin has dropped below $60,000 several times, although it quickly rebounded and was at $62,610 at the time of writing. The anticipated surge in price has yet to materialize.
In addition, it is worth noting that the Rune protocol, which went live at the same time as the halving, caused a frenzy and temporarily increased the transaction fees on the Bitcoin network. At one point, the average daily transaction fee soared to nearly $130, alleviating some of the pain caused by the halving for miners. However, as the hype around Rune quickly faded, the average daily transaction fee plummeted to below $1, increasing the pressure on miners to sell.
The Kaiko research team warns in their report that Bitcoin mining companies, which hold a significant amount of Bitcoin reserves, are facing the pressure to sell Bitcoin. According to Kaiko data, two major publicly listed mining companies in the United States, Marathon Digital and Riot Platforms, hold over $1.6 billion worth of Bitcoin. Marathon Digital holds 17,631 BTC valued slightly above $1.1 billion, while Riot Platforms holds 8,872 BTC valued over $500 million.
Another cryptocurrency research firm, 10x Research, also issued a warning in their report last month about the post-halving trend. Their analysts predicted that miners may liquidate $5 billion worth of BTC after the halving, and this selling pressure may continue for 4 to 6 months, causing Bitcoin to consolidate in the coming months. This could pose significant challenges to the cryptocurrency market during the six-month summer calm period, especially for altcoins.
Overall, the completion of the fourth Bitcoin halving and the decline in transaction fees after the Rune hype have significantly increased the pressure on Bitcoin mining companies to sell BTC.