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Are crypto miners losing faith in Bitcoin? Over 10K BTC dumped | Cryptopolitan


The ongoing crypto winter has been harsh for everyone involved in the overall DeFi space. However, it has been specifically challenging for miners who are struggling to make profits from long-term holdings. 

Miners have always been synonymous with HODLing. Bitcoin volatility has brought tremendous returns for miners in the past decade, as significant bull runs have returned massive profits for miners. However, the continuous decline of BTC prices this year, coupled with sustainability and power supply issues has made it critically challenging for miners to keep BTC as long-term assets. 

On-chain data suggested that 10,000 BTC has been removed from miner pools to various crypto exchanges, as of December 1st. This is an indication that miners are increasingly liquidating their Bitcoin holdings, which suggests a negative sentiment towards long-term positions. 

Crypto miners are continuously losing profit opportunities 

The potential financial incentive of crypto mining was substantial even a year ago. However, these opportunities are drastically declining, not just because of the bear market but also several associated issues. 

With environmental concerns about mining being emphasized by the wider communities, most of the major blockchains are shifting to the Proof-of-Stake model, which doesn’t require power-hungry mining operations to validate transactions. Ethereum is the latest example of this, as the leading blockchain network moved from PoW to PoS in September. 

Most important, mining has become historically expensive in 2022. Major countries like China have completely banned crypto-mining operations, whereas other countries are heavily taxing such activities. On top of that, the ongoing Russia-Ukraine war has massively increased energy prices around the world. Therefore, the mining rewards are continuously becoming smaller, as costs are increasing. 

With environmental concerns at the heart of the crypto community and the energy crisis far from being resolved, 2023 is likely to be grim for miners. However, several projects are being established to support this ongoing distress for the mining community. For instance, last month, Binance pool announced a $500 million loan initiative for public and private miners. 

These initiatives will help the community to sustain the ongoing losses. However, it is rather inevitable that mining operations will continue to decline in the near future, as rewards will become smaller. 



Read More: Are crypto miners losing faith in Bitcoin? Over 10K BTC dumped | Cryptopolitan

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