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$300 million worth of Bitcoin dumped by miners in 24 hours

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By Shella Artillero - - 5 Mins Read

Bitcoin mining companies have traded over $300 million worth of Bitcoin in the last twenty-four hours in an effort to offset their mining costs. More than 14,000 bitcoins were sold at the conclusion of the previous week, according to CryptoQuant data.

Even while selling off such sizable amounts might have increased market turbulence, it didn't. Instead, the cost of bitcoin increased by more than 5%. According to CoinMarketCap, the price of one bitcoin was $22,083 at the time of writing.

Bitcoin diminishes value under poor market conditions

The pressure on Bitcoin mining companies may very well be increasing because of the increasing market volatility. The value of Bitcoin alone has decreased by around 70% from its top of $69,000. Joseph Ayoub, a Citi analyst, had similar ideas in his letter. He understood that it would be foolish to continue because the cost of mining might be higher for some miners than the price of Bitcoin.

As a result, the corporations can keep their balance sheet by selling off their Bitcoin. Mike Levitt, the CEO of the cryptocurrency mining firm Core Scientific, said that miners also had expenses to cover. Over 7000 bitcoins were sold by the company at an average price of $23,000.

Levitt claimed that despite the business' prosperity, expenditures were eating into its profits. Levitt stated that it would purchase ASIC servers, create data centers, pay off debt, and settle employee grants using the money from its bitcoin sale.

However, Levitt pointed out that any increase in the price of bitcoin would be highly advantageous to the business. Furthermore, he emphasized that the system profitability had increased as a result of the market conditions driving away less-efficient miners.

Demand Energy Usage Report from Bitcoin Mining Companies

Meanwhile, a number of US legislators have urged the government to step in and regulate energy use. The group claimed that the goal of the intervention was to lessen the environmental damage caused by bitcoin mining.

According to their analysis, the US crypto mining sector as a whole is probably going to have energy and pollution issues. The Democrat representatives think that until an analysis of energy consumption is done, it will be impossible to determine the damaging effects of cryptocurrency mining on the environment.

The price of bitcoin is currently $21,600, having increased by around 3% over the previous day. However, the overall cryptocurrency market has been in a downturn for several months, with bitcoin down over 70% from its record high of about $69,000 in November 2021.

As the conflict between Russia and Ukraine continues, inflation is on the rise and energy prices are reaching all-time highs.

Some miners are selling bitcoin at the present price in an effort to limit their exposure to future market volatility and reduce the risk to their bottom line. Lower bitcoin prices and increased energy costs are reducing profit margins for miners.

“Given rising electricity costs, and bitcoin’s steep price decline, the cost of mining a bitcoin may be higher than its price for some miners,” Citi analyst Joseph Ayoub wrote in a note on July 5.

The email stated, "With high-profile reports of resignations from mining businesses as well as miners who have used their equipment as collateral to borrow money, the pressure on the bitcoin mining industry may be mounting.

Because the company has so high operating leverage in the long run, Levitt is upbeat. Every dollar increase in the price of bitcoin above a particular threshold represents 100% operating income for bitcoin miners.

If bitcoin were to return to $35,000 or $40,000, "we would all be cheering loudly." That is beyond question," he remarked.

However, productivity per unit of electricity is also important, and large-scale miners like Core Scientific typically face less competition from hobbyists and tiny companies when prices are low.

As less productive miners leave the network, the global cash rate, or the level of competition for the creation of bitcoin, declines as prices fall, according to Levitt.