After the recent Bitcoin (BTC) halving, Bitcoin mining Significant changes have occurred, affecting both small and large miners. While smaller miners are dumping Bitcoin to cover fees, high-profile institutional investors such as Marathon Digital Holdings and Riot Platform are buying more Bitcoin. This trend shows the different methods and resources available to the mining industry after the Bitcoin halving.
Impact of the Halving on Small Miners
The most recent second halving occurred on April 19, reducing mining rewards from 6.25 BTC to 3.125 BTC. This puts more pressure on miners, especially those with high costs or inefficient machinery. In this new situation, it is difficult for small miners with lower profit margins to continue operating.
since #bitcoin Smaller miners selling for halving; bigger miners have accumulated.
This makes sense with reports from large publicly traded mining companies: reserves are increasing, and some are even buying Bitcoin. pic.twitter.com/E3j7IrcaVU
— Julio Moreno (@jjcmoreno) July 30, 2024
As the cost of mining rises, small miners must liquidate their Bitcoin to pay the fees. The reduction in incentives affects their profitability, forcing them to sell assets more frequently. As a result, small miners face more risks and financial pressure due to market volatility.
Notably, operational challenges are exacerbated by the current low “hash prices,” which are at their lowest levels in the past few months. Reduced rewards and falling hash prices have also affected small miners, creating additional financial challenges. These factors make it necessary for them to sell Bitcoin to maintain operations.
Increase in Bitcoin Holdings by Marathon and Riot
On the other hand, large mining companies have been able to respond to the halving by increasing their Bitcoin reserves. Large enterprises such as Marathon Digital Holdings and Riot Platform also revealed that their Bitcoin holdings increased. This accumulation strategy is consistent with their long-term investment strategy as they expect prices to rise in the future.
Marathon Digital Holdings recently purchased $100 million in Bitcoin from the open market. The company has strengthened its policy of holding mined Bitcoins, returning to a “HODL” approach. This move shows that holders have high confidence in the future appreciation of Bitcoin and has changed their long-term asset accumulation strategy.
Riot Platform has followed a similar strategy, increasing its Bitcoin holdings as the mining landscape shifts. The company’s improved operational efficiency and reduced electricity costs have allowed it to increase its Bitcoin holdings. Both companies have proven their strength and financial stability in the face of declining mining rewards.
Conclusion
In conclusion, the Bitcoin halving has had varying effects on small and large miners. Small miners are facing challenges and financial pressures, leading them to sell Bitcoin to cover costs. On the other hand, large mining companies like Marathon Digital Holdings and Riot Platform are accumulating more Bitcoin, showcasing their confidence in the future value of the cryptocurrency. The shifting landscape of Bitcoin mining presents opportunities and challenges for miners of all sizes.
