Bitcoin miners are facing ongoing forced selling due to reduced rewards and lower network fees, according to the latest report from Kaiko Research. Since the Bitcoin halving event, miners have been selling their holdings to cover operational costs.
Bitcoin network fees have plummeted by 90% over the past six months, from $45 in January 2024 to an average of $3 to $5. A temporary spike to $150 occurred post-halving due to a surge in NFT minting, but it quickly subsided.
Miners are now grappling with reduced block rewards, down from 6.25 BTC to 3.125 BTC, amid increased mining costs and a stagnant Bitcoin price. Marathon Digital, a major Bitcoin miner, sold 390 BTC in May and plans further sales, which could drive BTC prices lower.
To cope, some miners are exploring other PoW cryptocurrencies like Kaspa and engaging in industry mergers to streamline operations. Kaiko predicts continued consolidation, as evidenced by recent moves from Riot Blockchain and CleanSpark Inc.
The strategic importance of these developments lies in their potential to reshape the Bitcoin mining landscape, promoting efficiency and sustainability amid ongoing financial pressures.
