- Crypto miners are not selling their Bitcoin and Ethereum.
- The value of crypto assets held by miners has reached all-time highs.
- The data suggests that miners see potential in Bitcoin and Ethereum’s future growth.
Share this article
On-chain metrics and company production reports show that Bitcoin and Ethereum miners are holding off from selling their mining rewards. The value of crypto held by miners has reached new all-time highs.
Crypto Miners Refuse to Sell
Crypto miners appear to be adopting a “HODL” strategy.
Recently released production reports from North American mining companies show a significant increase in the amount of Bitcoin being held by miners. Mining firms Riot Blockchain, Marathon Digital, Bitfarms, Hut8, Argo Blockchain, and HIVE have collectively stockpiled more than 20,000 Bitcoin, valued at over $1.1 billion.
On Ethereum, on-chain data also shows an uptick in the amount of ETH being held. According to the behavior analytics platform Santiment, miner balances stand at 532,750 ETH, the highest levels since 2016. The value of the stockpiled ETH has blown past all-time highs and is quickly approaching $2 billion as the second-largest cryptocurrency edges higher.
#Ethereum is up to $3,480, the coin’s highest price in 16 days. Notably, miner balances have continued to skyrocket. 532.75k $ETH is the largest balance held by miners since July 13, 2016. The value of these coins is $1.85B, easily an #AllTimeHigh. https://t.co/zf2g4ypqiJ pic.twitter.com/atPnYLhAgc
— Santiment (@santimentfeed) October 5, 2021
Instead of selling their mining rewards to cover operating costs and fund expansion plans, mining firms are instead choosing to raise capital in other ways to avoid parting with their crypto. For example, Toronto-based Hut8 recently filed to raise $150 million through a public offering, betting that the appreciation of the company’s crypto assets would make up for the short-term price dip from diluting its shares.
Other companies have started using their mining rewards as collateral to take out loans. Argo Blockchain recently finalized a deal with Galaxy Digital Holdings for a $25 million loan using Bitcoin as collateral.
The past several months have been a unique opportunity for North American miners to expand. Following crackdowns on crypto mining in China, the Bitcoin hash rate plummeted, causing the mining difficulty to drop by 28%. As such, companies that continued mining throughout the summer were able to mine record amounts of Bitcoin and Ethereum.
The unwillingness of miners to part with their crypto assets shows widespread bullish sentiment in the industry. Mining companies seem to have decided that the long-term upside potential of holding on to their Bitcoin and Ethereum is too great to pass up.
Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies.
Exodus: China’s Bitcoin Miners Relocate Amid Regulatory Crackdow…
Publicly-listed Bitcoin mining firm BIT Mining is one of many operations moving overseas due to the ban imposed by the Chinese government. Another Chinese province pulls the plug on Bitcoin…
El Salvador Volcanoes Have Started Mining Bitcoin
El Salvador’s Bitcoin mining efforts are heating up, as the Central American nation has successfully mined Bitcoin using the geothermal energy of a volcano. El Salvador Mines Clean Bitcoin Using…
Crypto Mining Firm Argo Blockchain Heads to Nasdaq
Argo Blockchain’s IPO could raise over $145 million. Argo Blockchain Goes Live on Nasdaq Argo Blockchain has launched an Initial Public Offering, the firm announced today. New RNS: Argo is…
How to Trade Using the Inverse Head and Shoulders Pattern
In stock or cryptocurrency trading, you may have heard of the term “inverse head and shoulders.” Also known as the “head and shoulders bottom” formation, the inverse head and shoulders chart pattern can…