Selling pressure in the cryptocurrency market is expected to increase as Bitcoin miners face a significant drop in revenue, according to researcher Kaiko. This pressure stems from a recent Bitcoin code update known as the “halving,” which took place in late April.
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The halving, a preprogrammed update in the blockchain, occurs every four years and cuts the mining subsidy—Bitcoin rewarded to miners for validating transaction data—by half. The most recent halving, the fourth since 2012, reduced daily Bitcoin production from 900 tokens to 450. This reduction translates to an annual revenue loss of about $10 billion (R183 billion) based on Bitcoin’s price at the time.
Crypto-mining companies like Marathon Digital, Riot Platforms, and Cipher Mining, which rely heavily on mining subsidies, have been directly impacted. Although miners attempted to offset this loss by earning more transaction fees, which constitute another revenue stream, the recent memecoin frenzy provided only temporary relief. As the memecoin craze subsided, transaction fees also dropped sharply.
“If miners were forced to sell even a fraction of their holdings over the coming month, this would negatively impact markets,” Kaiko reported on Monday. The report also noted that trading activity typically slows and liquidity decreases during the summer months.
Despite the challenges, Bitcoin miners have been holding more of their reserves over the past two years, especially following the sharp rebound in the digital asset market. During the last crypto meltdown in 2022, miners sold most of their reserves. Currently, Marathon and Riot, two of the largest public Bitcoin mining companies, hold substantial amounts of Bitcoin—17,631 BTC worth just over $1.1 billion (R2.2 trillion) and 8,872 BTC worth over $500 million (R9.2 trillion), respectively.
On Monday, Bitcoin rose about 2% to around $62,730 but remains down around 15% from its all-time high of nearly $74,000 reached in March. Shares of Marathon remained relatively unchanged at around $17.05 (R313), down 27% for the year. Riot’s stock was also stable at $9.46 (R174), having fallen about 40% since the start of 2024.
