Data from IntoTheBlock shows that the amount of Bitcoin held by miners has reached its lowest level in over 14 years. As of June 19, miner reserves dropped to 1.90 million BTC, down from the 1.95 million BTC at the beginning of the year. This is the smallest amount held by miners since February 2010.
According to Lucas Outumuro, head of research at IntoTheBlock, this decline in miner reserves is expected as the halving event puts pressure on their margins, making them more likely to sell their Bitcoin. In the proof-of-work consensus mechanism of Bitcoin, miners are rewarded with new Bitcoin for validating transactions and securing the network. Miner reserves refer to the unsold Bitcoin held by miners.
The halving event, which occurs roughly every four years, reduces the mining subsidy by half. The most recent halving, which took place on April 20, 2024, reduced mining rewards from 6.25 BTC to 3.125 BTC. Outumuro notes that historically, the selling pressure from miners has been relatively slow due to the gradual reduction in rewards.
Despite the decrease in Bitcoin rewards, the dollar value of miner reserves has remained around its all-time high of approximately $135 billion. This means that even though miners are holding fewer Bitcoin, the value of the BTC they hold is higher.
Sascha Grumbach, CEO of tokenized mining firm Green Mining DAO, believes that miners have learned from past cycles and are adapting to the current market conditions. Grumbach suggests that having less Bitcoin is normal in the current phase of the market.
A report by CoinShares predicts that Bitcoin’s hashrate will increase in 2025 after a temporary dip following the halving. The decrease in rewards and increased competition lead to a decrease in the amount of Bitcoin produced per unit of hash power, resulting in higher production costs.
Overall, the data shows that miners are holding a smaller amount of Bitcoin, but the dollar value of their reserves remains high. This trend is expected due to the halving event and the evolving market conditions.