According to data from IntoTheBlock, the amount of Bitcoin held by miners has reached its lowest level in over 14 years. On June 19, miner reserves dropped to 1.90 million BTC, compared to the 1.95 million BTC they started the year with.
This is the smallest amount of Bitcoin that miners have held since February 2010, and it is expected that they will continue to hold less Bitcoin over time due to the halving event. The halving reduces the mining rewards, putting pressure on miners’ profit margins and making them more likely to sell their reserves.
In Bitcoin’s proof-of-work consensus mechanism, 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 occurs roughly every four years and halves the network’s mining subsidy. The most recent halving took place on April 20, 2024, reducing mining rewards from 6.25 BTC to 3.125 BTC. While this puts pressure on miners to sell their reserves, historically it has not been a major selling pressure.
Despite the decrease in Bitcoin rewards, the value of miner reserves in US dollars has remained around its all-time high of approximately $135 billion. This means that although miners are holding fewer Bitcoin, the dollar value of their reserves is higher.
According to Sascha Grumbach, CEO of tokenized mining firm Green Mining DAO, miners have learned from past cycles and are adapting to the changes caused by the halving. They understand that having less Bitcoin is normal in the current market phase.
A report by CoinShares predicts that Bitcoin’s hashrate will surge in 2025 after a post-halving dip. The decrease in Bitcoin rewards and increased competition lead to a decrease in the amount of Bitcoin produced per unit of hash power, which in turn raises production costs.
Overall, it is expected that miners will continue to hold less Bitcoin as the halving event puts pressure on their profit margins. However, the value of their reserves in US dollars remains high, indicating that they are adapting to the changes in the market.