Bitcoin Miners Hoard BTC Worth $2.8B Ahead of Halving in Anticipation of Potential New All-Time High
Bitcoin Accumulation by Miners | Image: Pete Linforth/ Pixabay
Key Takeaways
- Bitcoin miners are reportedly amassing the crypto to the tune of $2.8 billion.
- The upcoming Bitcoin halving will reduce the miners’ reward by 50%.
- Will the Bitcoin price increase and profit the miners?
Prominent mining players such as Marathon Digital, CleanSpark, and Bitfarms are reportedly collectively holding Bitcoin valued at around $2.8b. This accumulation comes just days before Bitcoin halving— an event that slashes mining reward by half. While the anticipation is of a price rise, a little over a month after BTC reached an all-time high, how will it actually play out?
Bitcoin Accumulation by Miners
Cryptocurrency miners are currently hoarding near-record amounts of Bitcoin. A report by The Miner Mag, cited by the Financial Times, finds that major players like Marathon Digital, CleanSpark, and Bitfarms are among the accumulators of Bitcoin worth $2.8 billion.
The development comes right before the Bitcoin halving will reduce the reward for mining new blocks to 3.125 BTC. There is some anticiption surrounding a Bitcoin price rise to make up for the reduction in supply.
According to Parth Chaturvedi, Investment Lead at CoinSwitch Ventures, this upcoming halving could push Bitcoin’s annual inflation rate below that of gold for the first time.
He told CCN: “Such a scenario holds transformative potential, particularly among the younger generation, who may increasingly view Bitcoin as a modern-day store of value akin to how preceding generations regarded gold. This shift in perception could fundamentally reshape investment attitudes and strategies for years to come.”
Market Performance of Bitcoin
Despite the stockpiling by miners, the market performance of publicly traded Bitcoin mining companies has been mixed. According to a recent research report co-written by analyst Gautam Chhugani from Bernstein, Bitcoin itself has seen substantial gains, increasing nearly 300% since last year. But a report by Forbes finds that the shares of notable mining companies like CleanSpark, Marathon Digital, and Riot Platforms have underperformed.
However, the Bernstein report is optimistic, projecting Bitcoin could reach highs of up to $150,000 in 2025 from its current range of $65,000.
Bitcoin price in that range will improve the profitability of mining. In 2024, BTC mining profitability is at the lowest range in three years, according to Bitinfocharts.
Therefore, any increasing costs would take a further hit on mining profits. Ki Young Ju of CryptoQuant, noted in a post on X that the cost of mining using the latest technology, like the Antminer S19 XPs, could double from $40,000 to $80,000 after the halving.
Therefore, for mining operations to remain profitable, Bitcoin’s market price would need to reach new all-time highs, a scenario that adds pressure but also potential for more returns for miners. Considering Bitcoin has underwent a minor correct and its current range of $65,000 fails to cover the increased cost.
Will Bitcoin Price Rise?
As the Bitcoin halving approaches, the Bitcoin price rise is in focus. Miners are accumulating BTC in the anticipation of a price rise. The stockpiling of Bitcoin by major miners reflects a collective optimism about Bitcoin’s future value.
However, BTC is still about $10,000 from breaking past the record price of $73,750 it reached on March 14. We still don’t know whether or not Bitcoin can take advantage of a supply reduction to reach a new all-time high post-halving.
If Bitcoin can indeed surpass previous price records and stabilize at higher levels, it could not only ensure the sustainability of mining operations but also reinforce profitability for the miners who have taken a hit in the last three years.
