TechFlow news, bitcoin miners are facing pressure from a sharp decline in revenue and may sell large amounts of bitcoin. According to data from cryptocurrency research and analysis firm Kaiko, miner income comes from two main sources: block rewards and transaction fees. However, both sources of income have declined in recent weeks.
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The April halving event reduced the block reward from 6.25 BTC to 3.125 BTC, creating unique headwinds for miners as the cost of producing new blocks remains high, forcing them to sell bitcoin to cover operational costs.
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At the same time, miner income from transaction fees has also decreased. In the first week of May, miner earnings from transaction fees fell below their mining income.
"Halvings are typically selling events for bitcoin miners, as the process of creating new blocks incurs significant costs, compelling miners to sell to cover expenses," Kaiko researchers said in a new report.
Potential bitcoin selling could have a significant impact on the crypto market, especially during periods of low market liquidity. For example, Marathon Digital, a mining company holding $1.1 billion worth of bitcoin, could trigger substantial market volatility by selling only a small portion of its holdings.
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