Leading Bitcoin miners were binge-selling in October, dumping 5,492 BTC, more than they had mined in the same period. There were concerns about the abrupt increase in the sales of recently minted tokens by open Bitcoin miners, particularly considering that Bitcoin had a significant monthly increase of 26%.

Companies like Marathon Digital Holdings and Core Scientific Inc. exceeded a 100% sell-production ratio, according to data from TheMinerMag. This data indicates that they used some of their current reserves in addition to selling all the Bitcoin they had mined in October.

Hut 8 and Bit Digital went even further in October, liquidating more than 300% of their BTC production. The sell-to-production ratio of 105% has changed significantly from the 64%, 77%, and 77% percentages noted in July, August, and September, respectively.

Why is There Such a Strong Sell-Off By Bitcoin Miners?

Leading Bitcoin Miners Were Binge-Selling in October 2023

Bitcoin Miners are proactively preparing for the upcoming “halving” anticipated early next year and riding Bitcoin’s price recovery wave. By selling some of their Bitcoin holdings, bitcoin miners are increasing their cash reserves in anticipation of the halving, which will slash mining payouts in half.

The enhanced BTC sale is a proactive step to strengthen miners’ financial positions, guaranteeing they can weather the storm of decreasing rewards. These calculated risks are essential to their long-term viability in the volatile cryptocurrency.

A serious problem with the Bitcoin blockchain has left thousands of transactions pending approval. The blockchain has had difficulties over the past week due to this network congestion.

In September, there was an abrupt increase in inscriptions or transaction data, which increased BTC transaction fees and created significant backlogs. The average charge has risen to over $5.9, one of the highest amounts for 2023, and it hasn’t decreased yet, according to data from YCharts.

Numerous users have discovered their Bitcoin is blocked on the blockchain, awaiting confirmation, due to increased Bitcoin inscriptions and transaction fees.

There Are So Many Unconfirmed Transactions

Leading Bitcoin Miners Were Binge-Selling in October 2023

Currently, the blockchain has 157,101 unconfirmed Bitcoin transactions, according to the Archive Today website. These are low-priority transactions, with an average processing cost of $3.38 applied to high-priority transactions. Due to the massive backlog, miners may need many days to process all these unconfirmed transactions.

On Tuesday, November 7, there were only about 72,000 Bitcoin inscriptions daily, suggesting that space is being released to deal with the backlog. The backlog will be cleared faster by miners if the inscription rates keep falling. On the other hand, another abrupt rise in inscriptions would widen the backlog and prolong network congestion on the Bitcoin blockchain.

In conclusion, miners’ significant sell-off of Bitcoin in October, driven by network congestion spikes, reflects the complex interplay between market dynamics and the underlying technology.

It underscores the challenges and decisions miners face in a rapidly evolving cryptocurrency landscape, impacting both short-term price volatility and the long-term health of the Bitcoin network.