Kaiko Report: Bitcoin Miners Navigate Pressure from Reduced Rewards Post-Halving

Kaiko Report: Bitcoin Miners Navigate Pressure from Reduced Rewards Post-Halving

Analysts at blockchain firm Kaiko have highlighted the growing pressure facing Bitcoin miners following the recent halving, which has led to a decline in daily average network fees.

According to a recent research report by Kaiko, Bitcoin miners are experiencing a shift in dynamics as daily average network fees, initially boosted by the halving, have started to decrease. The surge in fees provided temporary relief for miners, but the subsequent decline has raised concerns about selling pressure among miners.

Historically, the halving event prompts miners to sell their crypto holdings to cover the costs of creating new blocks. While the spike in average network fees helped alleviate this need, the recent cooling off period has reignited fears of selling pressure from miners.

CoinShares’ Head of Research, James Butterfill, notes that miners are adapting by shutting down unprofitable rigs to manage expenses instead of resorting to selling Bitcoin. However, the timing and extent of any potential selling activity remain uncertain.

Kaiko’s report emphasizes that miners often classify their BTC holdings as “current assets” on their balance sheets, allowing them to sell holdings to cover operational expenses. Major miners like Marathon Digital and Riot Platforms hold substantial BTC reserves, valued at over $1.1 billion and $500 million, respectively. The analysts caution that any significant selling of these holdings could negatively impact the markets.

As miners navigate the challenges posed by reduced rewards post-halving, market observers are closely monitoring the evolving dynamics within the Bitcoin mining sector for potential implications on market stability and price movements.

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