Bitcoin mining reserves are at their lowest level in 12 years: here’s why


The amount of Bitcoin held in reserve by mining companies has fallen to lows not seen since February 2010, according to block chain analytics company IntoTheBlock. And that has been true for most of this year.

As of Wednesday afternoon, Bitcoin miners they have 1.91 million BTC in their wallets, according to IntoTheBlock. Bitcoin miner reserves have been above the 2 million BTC mark, first surpassed on February 19, 2010, for just 46 days since the start of 2022. This illustrates the impact of miners selling their Bitcoin throughout the year, sometimes selling more in a month than they minedto offset earnings that have dwindled as the market has suffered.

IntoTheBlock uses a machine learning algorithm to identify the miner purse addresses and tracks your holdings, including wallets linked to miners or mining pools that accumulate BTC but do not actively mine it. The total BTC held in those wallets constitutes the analytics firm’s mining reserve metric.

The fact that reserves have stayed below the 2 million BTC mark as often as they have this year underscores how dire things have been for the industry. Bitcoin miner reserves initially sank below 2 million in July of last year on news of the Repression of mining in Chinabut that figure later recovered.

The pain this year has been more prolonged.

Companies that borrowed millions against their mining equipment, such as clean spark Y Argohave seen month after month of losses.

Just last month Compute North filed for bankruptcyiris energy sold $100 million worth of stock to generate some cash, Compass Mining close its operations in Georgia and one of the largest Bitcoin mining pools, Poolin, frozen withdrawals.

The last time mining reserves were this low was a very different time for Bitcoin. In 2010, the cryptocurrency had only been released as open source software a year earlier, a few months after creator Satoshi Nakamoto published a White paper describing how peer-to-peer electronic money worked.

Bitcoin was first exchanged for US dollars in 2009 on the New Liberty Standard Exchange, when $5.21 could buy 5,050 BTC. At today’s prices, that amount of BTC would be worth nearly $97 million.

The Bitcoin mining industry was also in its infancy. Computer programmer Hal Finney received the world’s first Bitcoin mining reward of 10 BTC for mining block 70 on January 12, 2009. And for a time, miner reserves accounted for a sizeable portion of the Bitcoin in circulation.

On the day that mining reserves first surpassed 2 million in February 2010, for example, miners held one in five Bitcoins that had been created. Bitcoin miners’ share of coins in circulation has now dropped below 10%.

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