Bitcoin Miners Accelerate Sell-Off Amid Mounting Revenue Pressures

Publicly traded Bitcoin mining companies sold 115% of their April production, marking the most aggressive monthly liquidation since late 2022. This intensified sell-off occurred despite Bitcoin reaching a new all-time high of nearly $109,500 in May, underscoring the financial strain miners face amid declining profitability metrics.

The surge in Bitcoin’s price was insufficient to offset the challenges miners encountered. Hashprice—a key indicator measuring miner revenue per unit of computing power—remained under significant pressure. Throughout April, hashprice fluctuated between $40.71 and $49.08 per petahash per second , averaging $45.46. This level is perilously close to the break-even point for many operators, particularly those utilizing older hardware models like the Antminer S19 XP and S19 Pro.

Compounding the issue, Bitcoin’s network difficulty experienced an 8.3% increase over two consecutive adjustments in April, reaching an average of 120.98 trillion. This escalation in difficulty, coupled with a modest 1.5% rise in Bitcoin’s price, further compressed miners’ margins. Additionally, transaction fees, which constitute a portion of miners’ income, remained subdued. Although there was an 8.7% month-over-month increase in transaction fees, they still accounted for only 1.34% of total block rewards, offering limited relief.

The financial pressures have prompted miners to liquidate more Bitcoin than they produce. This trend reflects the urgent need to cover operational costs, including energy expenses and equipment upgrades. The situation is exacerbated by external factors such as rising energy prices and geopolitical uncertainties, including trade tensions that threaten to increase operational costs further.