Ryze Recap 6/4: Miners Selling Reserves, and Why That's Bullish
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Itâs Thursday, June 4. Our main story today revolves around the mining industryâ an often overlooked, but incredibly important aspect of the Bitcoin ecosystem.
1. Miners Selling Reserves Post-Halving
Miners are selling more Bitcoin than they are earning. In the last week, miners sold 6,839 Bitcoin, but only mined 6,063 new Bitcoin, according to data from ByteTree. This means that miners are selling Bitcoin from their reserves.
Some context:
Last month, Bitcoin underwent its 3rd Halving. In a nutshell, the amount of Bitcoin created roughly every 10 minutes was cut in half from 12.5 to 6.25 BTC. This newly minted Bitcoin is known as the block reward and is awarded to miners in return for securing the Bitcoin network and confirming transactions. Halving the block reward halved minersâ revenue.
Why this matters:
Miners sell Bitcoin to pay for operational expenses and electricity. Some miners arenât profitable anymore because of the revenue cut inflicted by the Halving. Inefficient miners may be bleeding out their Bitcoin reserves and holding out for a price increase to bring them back to profitability. More on miner economics and behavior here.
Some analysts contend that large mining operations sell reserves when they believe there are enough buyers to support the price. If so, then the disproportionately large amount of Bitcoin sold by miners in the last week may indicate that mining firms are leaning bullish.
Miners are either doubling down by selling reserves to survive as they bet on the price to increase, or theyâre selling because theyâre confident that they wonât push the price down. In either case, miners seem to be bullish and adapting to a 50% cut in revenue.
A few quick tidbits:
Avanti Financial Group, a Bitcoin-first bank aiming to service digital asset companies, has closed a $5M round of funding. Avanti is led by Caitlin Long, a Bitcoin advocate who advised the Wyoming State Legislature as they passed Bitcoin-centric regulation. Longâs experience with crypto-asset regulation will certainly prove useful for Avanti, which just submitted a bank charter application.
SEC Commissioner Hester Pierce was nominated for another 5-year term. Pierce was fondly nicknamed âCrypto Momâ due to her vocal support for an open regulatory environment for Bitcoin companies. The Commissioner publicly disagreed with the SECâs rejection of a Bitcoin ETF submitted by the Winklevoss twins.
Thatâs all for today! Weâll be back tomorrow with another Ryze Recap.