The current state of Bitcoin miner profitability is garnering attention, particularly in light of concerns regarding the susceptibility of BTC prices to their activities. As Bitcoin’s ticker hovers around $42,079, data suggests that miners may be prominent participants in profit-taking, especially given the challenges faced by BTC’s price near the $43,000 mark.
Recent data from Glassnode, an on-chain analytics firm, affirms the ongoing trend of mass offloading as the year concludes. Since mid-October, Bitcoin miners have consistently reduced their BTC balances. In the 24-hour period leading up to December 28, the balance in miner wallets decreased by 700 BTC. Compared to the local peak on October 22, miners’ balances have decreased by 12,700 BTC.
An accompanying chart showed production costs versus profit margins per Bitcoin, per Capriole data.
Despite BTC/USD rising from $30,000 to nearly $45,000 during this period, followed by consolidation into the yearly candle close, analyst Ali suggests that miner activity might be impacting the prospects of a bullish price continuation. Referring to data from on-chain analytics platform CryptoQuant, he characterizes the balance reductions as “substantial.”
In Q4, miners have experienced a notable increase in revenue, with transaction fees spiking amid the highest BTC price levels since April 2022. Charles Edwards, the founder of Capriole Investments, emphasizes the current profitability of the sector, stating that “Bitcoin miners are absolutely printing” in a recent post.
The forthcoming block subsidy halving is a focal point for market participants, as the block reward is set to decrease by 50% to 3.125 BTC. Filbfilb, co-founder of DecenTrader, anticipates miners will aim to accumulate BTC stocks ahead of this event. Charles Edwards has previously labeled the April halving event as the “most important” and a “transition point,” predicting that by 2024, Bitcoin will become the hardest asset globally, surpassing gold as the best store of value with a reduced inflation rate.
