Bitcoin Miners Dumping Spree Continues: CryptoCompare Report
The crippling impact of May and June’s crash on Bitcoin miners still persists. New data revealed that August recorded the fourth consecutive month that has seen negative miner net flows.
Bitcoin miners had to resort to selling in order to sustain themselves throughout August recording a net outflow of 21.3k BTC. The only month when miners accumulated BTC this year was April, as per the latest edition of CryptoCompare’s Asset Report.
Bitcoin Miners in Distress
The price of the world’s largest cryptocurrency remained below $24k for the most part in August and even traded beneath $20k for a few weeks, which in addition to a high hash rate that rose 5.28% to 212 million TH/s, forced miners to offload their tokens.
Bitcoin miners continued to take advantage of the several small upswings over the past months to book profits as a result of the repercussions of this year’s devastating crash that do not appear to fade anytime soon.
Public miners had managed to stack up a massive stash of BTC after the incredible 2021 bull run. But with the recent market downturn, these entities are quickly running out of coins to sell.
August has been difficult for several Bitcoin mining firms, including Stronghold, which recently disclosed about reaching an agreement with lender New York Digital Investment Group (NYDIG) and a broker to return around 26,200 mining machines in exchange for the cancellation of $67.4 million in debt.
Bitcoin Network Activity Sees Mild Recovery
While miner data demonstrated a gloomy picture, network activity witnessed a modest recovery. Bitcoin transaction volume, for one, rose by 10.5% to $2.39 trillion. CryptoCompare also observed an increase in the number of active addresses by 4.47% to 916k, while the number of new addresses saw an uptick of 3.10% to 395k.
Even as the number of transactions increased by 1.80% to 7.82 million, monthly fees dropped 27.0% to 410 BTC, resulting in the fall of average transaction fees by 28.2% to 5,190 Satoshis.
The drop in transaction fees in tandem with an increase in transactional activity can be credited to the increased usage of layer-2 scaling solutions such as the Lightning Network (LN). In August, the Total Value Locked (TVL) in the Lightning Network rose 12.0% to $3.16 billion, registering its first increase in five months.
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I’m a journalist who specializes in investigative reporting and writing. I have written for the New York Times and other publications.