Bitcoin Miner Reserves Drop to Record Low Amid Revenue Decline

Bitcoin miners are swiftly depleting their reserves in a desperate effort to strengthen their balance sheets against a significant drop in revenue efficiency.

Key Takeaways

Bitcoin miners have sold over 30,000 BTC since November 21, reducing their reserves to 1.803 million BTC, the lowest ever.
The significant drop in hashprice, now at an all-time low of $34.49 per petahash per second, has forced miners to sell assets to cover costs.
A disconnect between Bitcoin price and network difficulty is exacerbating the situation, with miners facing pressure to maintain operations despite negative margins.
Analysts warn of potential capitulation in the mining sector if Bitcoin prices do not recover quickly, which could lead to broader asset liquidation among miners.

According to data from CryptoQuant, miners have moved over 30,000 Bitcoin, worth approximately $2.6 billion, from their wallets since November 21.

Bitcoin Mining in a Critical Phase as Reserves Hit All-Time Low

The mass sell-off has reduced total miner reserves to 1.803 million BTC, marking the lowest point ever recorded.
![Bitcoin Miners Reserve. Source: CryptoQuant]
This sudden liquidity event indicates that miners are shifting their focus from accumulating Bitcoin to survival mode, compelled to sell their assets to manage operational expenses as cash flows shrink.

The primary reason behind this sell-off is a severe decline in mining profitability. Data from the Hashrate Index shows that Bitcoin’s hashprice has plummeted over 50% in recent weeks, reaching an unprecedented low of $34.49 per petahash per second. Hashprice is the standard metric used to track daily revenue generated per unit of computing power.
![Bitcoin Hashprice Over the Past Year. Source: Hashrate Index]

For perspective, even during the 2021 China mining ban and the height of the 2022 bear market, this figure rarely fell below $50. The current hashprice levels suggest that, for most miners, the expenses associated with producing a new Bitcoin now exceed the current market price of the asset.

Adding to the difficulties is a stubborn gap between Bitcoin’s price and network difficulty. While Bitcoin’s value has decreased by 22% over the past month to approximately $86,075, the network’s total computing power remains unchanged. The global hashrate stays high at over one zettahash, indicating that a significant competition is unfolding within the industry.

This situation means that well-funded public miners are keeping state-of-the-art mining equipment operational, even with negative profit margins. They are essentially subsidizing their production through equity financing or cash reserves.

This approach aims to push smaller, private miners—who do not have the same access to capital markets—out of the competition.

With these circumstances in mind, industry experts caution that if Bitcoin prices fail to reverse this trend soon, the mining sector could endure a prolonged period of financial struggle. In such a case, struggling miners might not only be compelled to sell their Bitcoin assets but also their physical mining setups.