The amount of Bitcoin held by miners has dropped to its lowest level in over 14 years, as reported by IntoTheBlock.
On June 19, miner reserves decreased to 1.90 million Bitcoin, down from 1.95 million BTC at the beginning of the year.
Lucas Outumuro, head of research at IntoTheBlock, explained that miners are expected to hold less Bitcoin over time due to the halving process, which puts pressure on their margins and increases the likelihood of them selling 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. Approximately every four years, the network’s mining subsidy is cut in half.
The most recent halving on April 20, 2024, reduced mining rewards from 6.25 BTC to 3.125 BTC.
“That being said, historically, this has been at a relatively slow rate, so it hasn’t been a major selling pressure,” Outumuro told Cointelegraph.
Despite the reduction in rewards, the dollar value of miner reserves has remained around an all-time high of about $135 billion.
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This indicates that while miners hold fewer Bitcoin, the value in USD is higher.
“It seems today’s miners have learned from past cycles,” noted Sascha Grumbach, CEO of tokenized mining firm Green Mining DAO, in a written commentary shared with Cointelegraph.
“Gone are the days of overleveraging and holding onto too much Bitcoin, a strategy that backfired in the past.”
An April report by CoinShares forecasts a surge in Bitcoin’s hashrate in 2025 following a post-halving dip.
The decreasing Bitcoin rewards and increasing competition reduce the amount of Bitcoin produced per unit of hash power over time, raising production costs.
“[Miners’] focus seems to be on short-term financial stability rather than long-term, large-scale accumulation of Bitcoin.”
Grumbach concluded, “In other words, having less Bitcoin is normal in the market phase we are in.”
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