According to a report from Hash Rate Index, Bitcoin miners continued to sell their supply in July. These entities have been negatively impacted by the decline in the price of BTC and an increase in their cost of operation which has led to financial stress for their operations.
So far, the report claims that Bitcoin miners have produced 3,470 BTC against 5,767 BTC sold. This behavior has contributed to lower BTC prices in 2022 and will continue to put pressure on the crypto market.
As seen below, major public Bitcoin miners have sold their BTC due to production delays. Very few miners were able to sell as much as they produced or did not sell at all.
The report claims that Core Scientific was the biggest seller with 1,970 BTC dumped into the market against 1,200 BTC produced. BitFarms and Argo follow with 1,600 BTC and around 900 BTC sold respectively.
The report claims that US-based bitcoin miners have been particularly hard hit. Operations there have been affected by a “series of heat waves” that have forced them to scale back or shut down operations due to power curtailment, the deliberate reduction in power generation to ease stress on the network. The report stated:
As the heat increased in July, grids were stressed by underproduction of energy assets (such as wind power in Texas) and over-demand due to the use of alternating current and other stressful inputs for the network ; many industrial-scale miners shut down during these times to stabilize the grid by returning power to power providers.
Why Some Bitcoin Miners Earned More Energy Credits Than BTC Mining
A closer look at the current state of the BTC mining sector reveals that operations may have been affected by other factors. In addition to heat waves, the report claims that miners could trade in old gear for newer S19 XP and newer mining hardware.
As a result, old hardware is decommissioned as new hardware is installed or moved to “new installations or installations of equipment with new racks or configurations (such as immersion cooling)”.
As seen below, Riot recorded a total of $9.5 million in energy credits as a result of its energy reduction activities. This is the equivalent of 439 BTC if the price of Bitcoin rises to around $21,600, according to the report.
In contrast, the company produced 318 BTC worth $6.9 million. In total, Riot earned over $16 million combining the two deals. The discount became a necessity for BTC miners in the US in July. The report stated:
Other Bitcoin miners in Texas, such as Argo and Core Scientific, also reduced their activities sharply during the month of July, but it is not clear if their power purchase agreement with ERCOT comes with or without not the same electricity credit guarantees.