New research from CryptoQuant indicates a significant decrease in the selling pressure from Bitcoin miners, suggesting a potential upward trend for BTC and the broader market in the near future.
This shift comes as the market digests the sell-off from miners who have been offloading Bitcoin to cover operational costs following the halving event. Miners have been a substantial force behind recent market declines, selling Bitcoin in over-the-counter (OTC) transactions due to decreased profitability.
The Bitcoin halving, which cut mining rewards from 6.25 to 3.125 BTC in April, rendered older mining equipment less cost-effective, leading to a reduction in mining activity and an increase in the need for miners to sell Bitcoin to sustain operations. Ahead of the halving, large, corporate mining operations seemed well poised to handle the reduced revenues. But now, even the big players are facing record-low profitability.
For example, Marathon Digital had sold 1,400 BTC as of June 10, compared to only 390 BTC throughout all of May. But now, CryptoQuant’s data shows a notable reduction in the amount of Bitcoin being transferred out of miners’ wallets.
If the current absorption of sell-offs continues, it could bolster Bitcoin’s price and potentially trigger a broader market rally.
This potential market rebound comes amid significant developments in the mining industry.
According to mining analyst Wolfie Zhao, who writes TheMinerMag newsletter for Blocksbridge, UAE-based Bitcoin mining company Phoenix earlier this week announced that its $370 million IPO on the Abu Dhabi Stock Exchange was oversubscribed. The company’s IPO prospectus reveals intriguing insights into its operations and financial health.
Phoenix Group segments its operations into three primary areas: proprietary Bitcoin mining, colocation hosting, and ASIC machine distribution.
The company boasts a hashrate capacity of 13.9 EH/s and has a significant footprint in both North America and the Middle East.
For the full fiscal year of 2023, Phoenix projected a total revenue of $247 million and an EBITDA of $172 million.
Interestingly, despite its emphasis on mining operations, Phoenix’s revenue stream appears to rely primarily on hardware sales. In 2022, its computer hardware trading subsidiary contributed $720 million to revenues, constituting 95.44% of the total.
Approximately $715 million of this amount stemmed from sales through distribution agreements with major mining hardware manufacturers Bitmain and MicroBT.
Edited by Stacy Elliott.
