Home Default Crypto Miners Are Stockpiling Bitcoin and Ethereum Rewards

Crypto Miners Are Stockpiling Bitcoin and Ethereum Rewards

by admin

Crypto News

cryptobriefing.com

08 October 2021 11:58, UTC

Reading time: ~2 m


On-chain metrics and company production reports show that Bitcoin and Ethereum miners are holding off from selling their mining rewards. The value of crypto held by miners has reached new all-time highs.

Crypto Miners Refuse to Sell

Crypto miners appear to be adopting a “HODL” strategy.

Recently released production reports from North American mining companies show a significant increase in the amount of Bitcoin being held by miners. Mining firms Riot Blockchain, Marathon Digital, Bitfarms, Hut8, Argo Blockchain, and HIVE have collectively stockpiled more than 20,000 Bitcoin, valued at over $1.1 billion.

On Ethereum, on-chain data also shows an uptick in the amount of ETH being held. According to the behavior analytics platform Santiment, miner balances stand at 532,750 ETH, the highest levels since 2016. The value of the stockpiled ETH has blown past all-time highs and is quickly approaching $2 billion as the second-largest cryptocurrency edges higher.

#Ethereum is up to $3,480, the coin’s highest price in 16 days. Notably, miner balances have continued to skyrocket. 532.75k $ETH is the largest balance held by miners since July 13, 2016. The value of these coins is $1.85B, easily an #AllTimeHigh. https://t.co/zf2g4ypqiJ pic.twitter.com/atPnYLhAgc

— Santiment (@santimentfeed) October 5, 2021

Instead of selling their mining rewards to cover operating costs and fund expansion plans, mining firms are instead choosing to raise capital in other ways to avoid parting with their crypto. For example, Toronto-based Hut8 recently filed to raise $150 million through a public offering, betting that the appreciation of the company’s crypto assets would make up for the short-term price dip from diluting its shares.

Other companies have started using their mining rewards as collateral to take out loans. Argo Blockchain recently finalized a deal with Galaxy Digital Holdings for a $25 million loan using Bitcoin as collateral.

The past several months have been a unique opportunity for North American miners to expand. Following crackdowns on crypto mining in China, the Bitcoin hash rate plummeted, causing the mining difficulty to drop by 28%. As such, companies that continued mining throughout the summer were able to mine record amounts of Bitcoin and Ethereum.

The unwillingness of miners to part with their crypto assets shows widespread bullish sentiment in the industry. Mining companies seem to have decided that the long-term upside potential of holding on to their Bitcoin and Ethereum is too great to pass up.

Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies.






#Crypto #Miners #Stockpiling #Bitcoin #Ethereum #Rewards

Related Posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.