Bitcoin miners currently hold about 10% of Bitcoin’s current supply – a market share that continues to decline over time.
According to data from IntoTheBlock, Bitcoin miners currently hold less than 2 million BTC in reserve.
That is the lowest amount of Bitcoin held by all tracked mining pools and pools since 2010, following a steady decline over the past decade.
Miners’ reserves are running out
IntoTheBlock data tracks Bitcoin belonging to on-chain addresses of various large miners and mining pools – including Poolin, F2Pool, Binance, Bitfury, and others.
In total, the total reserves were 1.92 million BTC as of October 2. Total reserves fell below 2 million BTC starting around June 13, while the Bitcoin price dropped and major industry players began to debt default.
That doesn’t tell the whole story though: the platform’s data shows that miners’ reserves have been steadily declining since September 2012, from their peak of around 3.1 million BTC. Before 2022, the last time Bitcoin miners held less than this month’s reserves was in February 2010.
Overall, the volatility of miners’ aggregate reserve balances has decreased over time. This may be related to Bitcoin’s supply release schedule. Every four years, the allowance attached to each Bitcoin block is cut in half – meaning that early miners can accumulate and sell the most Bitcoins in the shortest amount of time.
Furthermore, the price of Bitcoin has skyrocketed since its inception, meaning fewer Bitcoins need to be sold over time to cover costs in USD. As a result, miner balances remain above $44 billion in USD — relatively close to the all-time high of $59 billion in April 2021.
Pressure on miners
Despite the decline in both the price and reserves of Bitcoin miners, the network’s hash rate continues to rise to new highs. Improvements in mining technology allow miners to generate hashes that use less energy over time.
But an increased hash rate also means more competition for individual miners. Coupled with the bear market that is wreaking havoc on miner revenue, this year’s environment has proven that it is difficult for miners to stay profitable or even emerge.
Last month, Bitcoin mining company North Compute filed for bankruptcy, revealing up to $500 million in debt. Back in June, public miner Core Scientific sold most of its Bitcoin holdings.
Last week, data from Glassnode showed that miners are still selling around 8000 BTC per month, while long-term holders in general are selling their coins at a loss.