Why This Bitcoin Miner Sold 3,000 BTC Over The Past Week –
The Bitcoin mining sector has been impacted by BTC’s price downside price action. This has forced BTC miners to reduce their inventories, which could lead to constant selling pressure on the crypto market and reduce their leverage positions.
Related Reading | Iran to Shut Down Crypto Mining Farms As Energy Crisis Deepens
Publicly traded BTC mining company Bitfarms announced that it has sold 3,000 BTC for around $62 million over the past seven days. The company is adjusting its treasury strategy and trying to boost its liquidity, according to a press release.
In addition, the company has canceled a commitment to acquire new hardware by canceling a $37 million deal. In total, Bitfarms has improved its “corporate liquidity by approximately $100 million”.
As the price of Bitcoin dropped over 75% from its all-time high, BTC miners have been forced to react and adjust to current market conditions. This could become a hurdle for the crypto market, as the price of BTC and other larger cryptocurrencies could have a new obstacle that will prevent it from reaching new highs.
However, BTC miners selling their inventories could hint at a potential Bitcoin price bottom as market sentiment reaches extremes of fear levels after a 2-year bull run. Despite the increase in selling pressure, BTC saw an important reaction to the upside and could be forming a new price range.
As the press release claims, Bitfarms is holding 3,349 BTC with an average daily production of 14 BTC. The company plans to use a portion of the recently acquired liquidity to pay off a loan with Galaxy Digital and further reduce its leverage.
Leverage reduction, and natural supply and demand dynamics, are indicators of healthy markets with less exuberance. This could allow BTC’s price to recover and form a macro bottom as global markets shift under the pressure of new economic factors.
An Industry Maturing, Can Bitcoin Miner Survive The Crypto Winter?
Unlike previous market cycles, Bitcoin miners can adapt to market volatility and carry on with their operations. Rather than react to the price action, BTC miners are preparing to endure the crypto winter. Jeff Lucas CFO at Bitfarms said:
In consideration of extreme volatility in the markets, we have continued to take action to enhance liquidity and to de-leverage and strengthen our balance sheet. Specifically, we sold 1,500 more Bitcoin and are no longer HODLing all our daily BTC production.
Lucas claims the company is bullish on BTC’s price long-term potential. However, current market conditions require them to change their corporate strategy. Lucas added:
While we remain bullish on long-term BTC price appreciation, this strategic change enables us to focus on our top priorities of maintaining our world-class mining operations and continuing to grow our business in anticipation of improved mining economics.
Related Reading | Celsius Says Maintaining Financial Stability Will Take Time
At the time of writing, BTC’s price trades at $21,400 with a 3% profit in the last 24 hours.