CryptoQuant’s latest research shows that the selling pressure from Bitcoin miners has significantly decreased, indicating a potential upward trend for Bitcoin and the broader market in the near future.
This shift comes as the market is digesting the sell-off from miners who have been selling Bitcoin to pay for operational costs since the halving event. Miners have been a significant force behind the recent market downturn, selling Bitcoin in over-the-counter trades due to declining profitability.
The Bitcoin halving reduced mining rewards from 6.25 BTC to 3.125 BTC in April, making older mining equipment less cost-effective and leading to a decrease in mining activity. Miners have been selling Bitcoin to meet the increased demand for operational costs. Before the halving, large mining companies seemed to have prepared for the reduced income. However, even large companies are now facing record-low profitability.
For example, as of June 10th, Marathon Digital Holdings had sold 1,400 Bitcoin, compared to only 390 Bitcoin sold in May. But now, CryptoQuant’s data shows a significant decrease in the amount of Bitcoin transferred from miner wallets.
If the current sell-off continues, it could push up the price of Bitcoin and potentially trigger a broader market rebound. This potential market rebound comes at a time of significant development in the mining industry.
Wolfie Zhao, a mining analyst who writes for Blocksbridge’s TheMinerMag newsletter, said that Phoenix, a UAE-based Bitcoin mining company, announced earlier this week that its $370 million IPO on the Abu Dhabi Securities Exchange was oversubscribed. The company’s prospectus revealed interesting insights into its operations and financial health.
Phoenix Group divides its business into three main areas: proprietary Bitcoin mining, hosting, and ASIC machine distribution. The company has a hash rate capacity of 13.9 EH/s and has a significant presence in North America and the Middle East.
For the entire fiscal year of 2023, Phoenix expects total revenue of $247 million and EBITDA of $172 million.
Interestingly, despite emphasizing its mining business, Phoenix’s revenue seems to depend mainly on hardware sales. In 2022, its computer hardware trading subsidiary contributed $720 million in revenue, accounting for 95.44% of total revenue. About $715 million of this revenue came from sales through distribution agreements with major mining hardware manufacturers Bitmain and MicroBT.
Edited by Stacey Elliott.