According to data from IntoTheBlock, the amount of Bitcoin held by miners has reached its lowest level in over 14 years. On June 19, miner reserves dropped to 1.90 million BTC, compared to 1.95 million BTC at the beginning of the year. This marks the smallest amount of Bitcoin held by miners since February 2010. Lucas Outumuro, head of research at IntoTheBlock, explains that miners are expected to hold less Bitcoin as the halving event puts pressure on their margins, making them more likely to sell their reserves.
In the proof-of-work consensus mechanism of Bitcoin, miners are rewarded with new Bitcoin for validating transactions and securing the network. Miner reserves refer to the unsold Bitcoin held by miners. Roughly every four years, the mining subsidy is halved. The most recent halving occurred on April 20, 2024, reducing mining rewards from 6.25 BTC to 3.125 BTC. Outumuro notes that historically, the rate at which miners sell their reserves has been relatively slow, so it hasn’t had a major impact on selling pressure.
Despite the decrease in rewards, the value of miner reserves measured in US dollars has remained near its all-time high of approximately $135 billion. This means that although miners are holding fewer Bitcoin, the dollar value of their holdings is higher.
Sascha Grumbach, CEO of tokenized mining firm Green Mining DAO, believes that today’s miners have learned from past cycles. He states that Bitcoin’s hashrate is expected to surge in 2025 after a temporary dip following the halving event. The decrease in rewards and increased competition lead to a decrease in the amount of Bitcoin produced per unit of hash power over time, which in turn raises production costs. Grumbach concludes that having less Bitcoin in the market phase we are currently in is a normal occurrence.
In a related article, the magazine explores the Bitcoin mining industry in Iran.