After the recent Bitcoin (BTC) halving, the dynamics in BTC mining have changed significantly, affecting both small and big miners. While the smaller miners are dumping their Bitcoin to cover expenses, more prominent institutional investors such as Marathon Digital Holdings and Riot Platform are buying more. This trend shows the different approaches and resources available in the mining sector after the halving of Bitcoin.
Small Miners Struggle Post-Bitcoin Halving Event
The second recent halving occurred on 19 April, reducing mining rewards from 6.25 BTC to 3.125 BTC. This has put more pressure on miners, especially those with high costs or less efficient machinery and equipment. The smaller miners working with low-profit margins struggle to continue their operations under these new circumstances.
Since the #Bitcoin halving smaller miners are the ones selling; Bigger miners have accumulated.
This makes sense with what large publicly-traded mining companies have reported: higher reserves and some even buying Bitcoin. pic.twitter.com/E3j7IrcaVU
— Julio Moreno (@jjcmoreno) July 30, 2024
With rising mining costs, smaller miners must liquidate their Bitcoins to cover expenses. The reduced incentives affect their profitability, forcing them to sell off their assets more often. Thus, smaller miners are exposed to more risks and financial pressure due to the market’s volatility.
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It is important to note that operational challenges are exacerbated by the current low ‘hashprice,’ which is at its lowest in the past few months. Decreased rewards and declining hash prices also affected small miners with more financial challenges. These factors make it imperative for them to sell Bitcoin to remain operational.
Marathon and Riot Increase Bitcoin Holdings
On the other hand, big mining firms have been able to cope with the halving by increasing their Bitcoin stash. Large corporations such as Marathon Digital Holdings and Riot Platform have also revealed a rise in their Bitcoin holdings. This accumulation strategy aligns with their long-term investment strategy as they expect prices to rise in the future.
Marathon Digital Holdings recently bought $100 million of Bitcoin from the open market. The company reinforced its policy of holding mined bitcoins, returning to the “HODL” approach. This move suggests that the holder has a high confidence level in the future appreciation of Bitcoin and a change in long-term strategy towards asset accumulation.
Riot Platform has also followed a similar strategy by increasing its Bitcoin holdings as the mining environment transforms. The company’s gains in operational efficiency and lower electricity costs enable it to increase its Bitcoin holdings. Both companies have proved their strength and financial stability in the face of decreased mining rewards.
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