With the bankruptcy of one of the largest cryptocurrency exchanges, FTX, the crypto market witnessed a panic sale. The total value of cryptocurrencies decreased by 18.75% in 1 week, falling below $ 800 billion.
While the panic in the market calms down for now, new data on which type of asset owners are coming from are slowly emerging. According to various on-chain market analyzes, Bitcoin miners were instrumental in the decline this week. Crypto miners have put up the biggest selling pressure on a daily basis since January 2021, according to analysts.
Like every private business, cryptocurrency miners work to make a profit. Bitcoin mining difficulty has continued to rise in recent months. The hashrate increase causes the miners to decrease the amount of Bitcoin they receive per transaction they verify. If we add the hashrate, the increase in energy costs and the drop of the leading cryptocurrency up to $ 16,000, the profitability of the giant mining companies is minimized.
Unable to make a profit, miners sell some of their Bitcoins to continue their cash flow. On-chain follower Glassnode revealed how deep the miner sale is with the chart it shared.
On the other hand, according to the data of the website Macromicro, the current average cost to the miner for the production of one BTC is around $ 23,800. Assuming the data is accurate, we can expect miner selling pressure to continue if the leading cryptocurrency continues to trade below cost for an extended period of time.