Bitcoin Miner Reserves Drop to Three-Year Low in Wake of Halving

Bitcoin reserves among blockchain transaction validators have diminished to their lowest in three years following an April update to the software code, which significantly cut their earnings. Data from Kaiko reveals that as of August 3, these miners possessed approximately 1,510,300 Bitcoin, a 2.4% decrease from the peak in December 2020. The current market valuation of these holdings is about $86 billion, representing roughly 8% of all circulating Bitcoin.

Miners began offloading Bitcoin in anticipation of higher prices as early as late 2023, a trend that accelerated post the April "halving" event. This latest update—the fourth of its kind—reduced the rewards miners receive for creating new blocks on the blockchain, which forced them to sell assets to cover operational expenses.

Bitcoin Miners Hold Least BTC in Three Years

This reduction in earnings was initially offset by an increase in network fees after the halving, though this relief was temporary as fees have now stabilized at $2, down from a post-halving peak of $143, Kaiko reports.

Interestingly, despite the general selling trend, public mining entities have augmented their Bitcoin reserves by 60% to 54,000 tokens since January 2023, as per filings with the US Securities and Exchange Commission. Notably, Marathon Digital Holdings Inc. acquired $100 million in Bitcoin recently.

However, the downturn has affected some more than others, with Core Scientific Inc. reporting a second-quarter loss of $804 million, largely due to a markdown in the valuation of its Bitcoin holdings to mirror the current market prices.

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