Bitcoin (BTC) miners have been up against the ropes over the past year, with record amounts of BTC sent to centralized exchanges to cover costs in 2023.
As Cointelegraph previously reported, the Bitcoin mining ecosystem has had an eventful year. The industry scored a staggering $184 million from transaction fees in the second quarter of 2023, eclipsing the total of 2022 on the back of a BTC price rebound and hype around BRC-20 tokens.
Stocks in prominent mining firms have also seen impressive gains in 2023, far exceeding Bitcoin’s market value performance. The top nine public Bitcoin mining firms saw their market capitalization increase by 257% from the start of 2023.
Meanwhile miners have also been forced to continue selling mined BTC to cover operational costs as the industry continues to attempt to claw its way out of a prolonged bear market. Miners sent a record $128 million worth of Bitcoin to exchange in June 2023, with industry experts highlighting miners’ propensity to send BTC to exchange to cash out, cover costs and lock in profits.
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A market report from Bitfinex suggests that mining firms are looking to derisk by offloading BTC to exchanges. Analysts believe miners are engaging in hedging activities in the derivatives market, carrying out over-the-counter orders or transferring funds through exchanges for other reasons.
Cointelegraph reached out to a number of prominent mining companies to unpack the current mining climate and the recent trends emerging from the sector.
Jaime Leverton, CEO of Hut8, highlighted the company’s efforts to close-off a merger with USBTC which has hampered its ability to raise capital through an at-the-market offering. After announcing the upcoming merger, Leverton said Hut8 treasury strategy included the option selling from its Bitcoin holdings and newly produced BTC to cover its operating costs:
“We plan to revisit our treasury strategy once our merger is complete. As such, we were the last major Bitcoin miner to sell part of our production earlier this year.
Leverton added that Hut8 still holds more that 9,100 BTC ($271 million) and the firm remains “bullish on Bitcoin and HODLing”, given that it retains one of the largest self-mined Bitcoin reserves from a publicly traded company.
Hut8 disclosed that it had sold 217 Bitcoin mined across May and June for $7.9 million in its most recently published production and operation update.
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