Bitcoin miners sell their hodlings, and ASIC prices keep dropping — What’s next for the industry?

Crypto companies are going belly up left and right and Bitcoin mining companies also appear to be taking on water faster than they can bail. In mid-June, Compass Mining CEO Whit Gibbs and CFO Jodie Fisher abruptly resigned after allegations that the Bitcoin mining hardware and hosting company had failed to pay hundreds of thousands of dollars in overdue electricity bills to Dynamics Mining, a facility provider for Compass.

Bloomberg recently reported that many industrial-size Bitcoin miners took on a significant amount of debt by leveraging their equipment and BTC as collateral for loans to either acquire additional gear or expand their operations. According to the report, and data from Arcane Research, miners owe some $4 billion in loans and now that Bitcoin price trades near its 2017 all-time high, the trend of miners liquidating their BTC holdings at swing lows to cover capital costs and operational costs is expected to pick up speed.

In the last month Marathon Digital, Riot Blockchain, Core Scientific, Bitfarms and Argo Blockchain PLC have each sold between 1,000 to 3,000 BTC to cover debts, operational (OPEX) and capital expenses (CAPEX).

The troubles faced by miners is also having a knock-on-effect on ASICs and their pricing at major mining hardware merchants like Big Sky ASICs, ASIC Marketplace, Bitmain and Kaboomracks shows popular top and mid-tier ASIC miners selling up to 70% down from their all-time highs in the $10,000 to $18,000 range.

With data from Arcane Research showing publicly traded industrial miners now selling more Bitcoin than they mined in May, it’s possible that some will either reduce their footprint and scale back, or go out of business if they are unable to cover OPEX and CAPEX debt.

According to Jaran Mellerud, a Bitcoin mining analyst at Arcane Research:

“If they are forced to liquidate a considerable share of these holdings, it could contribute to pushing Bitcoin price further down.”

Of course, news headlines and tweet threads only ever tell a small part of the story, so Cointelegraph reached out to Luxor Technologies head of research Colin Harper to gain clarity on how industrial miners view the current situation.

Cointelegraph: Bitcoin is trading below realized price and at times it’s dipped below miners cost of production. So far price has struggled to hold above the 2017 all-time high and the hashrate is dropping. Typically on-chain analysts pinpoint these metrics hitting extreme lows as a generational…