Bitcoin miners are switching to HODLing ahead of the April halving


Miners are adjusting their operational strategies and replenishing their coin supplies as the cryptocurrency market prepares for the Bitcoin halving, a quadrennial event scheduled around April 20, a recent industry report highlights.

Data collected by BTIG shows that mining companies such as Cleanspark (NASDAQ:), Marathon Digital (NASDAQ:) and Riot Blockchain (NASDAQ:) reduced their Bitcoin sales in the first quarter of 2024. According to “Crypto Mining Corner: #According to the “29” report, this strategy aims to increase their Bitcoin reserves in preparation for post-halving price movements while leveraging capital markets to fund their operations.

Cleanspark reported selling about 13 Bitcoins in the first quarter of 2024, a sharp decline from about 1,257 in the previous quarter. Marathon followed suit and sales fell from 2,365 Bitcoins to around 730, while Riot Blockchain sold 212 Bitcoins and stopped selling completely in February and March.

This trend among miners to “HODL” – a slang term in the crypto community for holding assets rather than selling them – is expected to tighten the available supply of Bitcoin. The upcoming halving will cut mining rewards by 50%, further exacerbating supply constraints.

The report also sheds light on the performance of Bitcoin and mining stocks, noting that mining stocks have faced downward pressure despite Bitcoin's price stability. BTIG attributes this to a shift in investor interest towards Bitcoin spot ETFs.

Additionally, the global hash rate – a measure of computing power used in mining and transaction verification processes – has risen sharply compared to last year, indicating increased mining activity as companies ramp up operations ahead of the halving.

Miners are responsible for creating valid Bitcoin blocks that add transaction records to the blockchain, the public ledger. With each successfully added block, miners are rewarded with newly minted coins. They also charge transaction fees.

Currently, miners earn 6.25 BTC for every block they mine. However, the halving event will see this reward drop to 3,125 BTC, effectively halving its earnings per block. To increase their profitability in the face of this decline in revenue, miners often look to invest in more efficient mining equipment and reduce operating costs.


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