Top Bitcoin miners expect a BTC price rally: experts

Industry experts expressed optimism about the industry and the leading cryptocurrency’s post-halving price performance in comments to crypto.news today, July 31.

Bitcoin mining has been in the spotlight since the last Bitcoin halving in April. The post-halving scenario usually marks a period of struggle for miners as mining rewards are reduced, which of course affects miners’ profitability. However, in comments to crypto.news today, several mining industry insiders suggested that Bitcoin miners are optimistic about the current market outlook.

Miners are expecting a surge in the price of Bitcoin (BTC) after the halving, which has historically occurred “three to six months after each halving event,” according to Sascha Grumbach, founder and CEO of Green Mining DAO.

Despite expectations that post-halving conditions would force miners to sell their assets to continue operations, a surprising trend has clearly emerged. According to Bitwise’s Q2 report, major mining companies have held the majority of Bitcoin holdings since April.

In the first quarter of 2024, the top five Bitcoin mining firms sold a combined total of around 2,000 BTC, a two-year low compared to over 7,000 BTC sold in the fourth quarter of 2023. As we approach June, this trend has not only continued but has intensified with little to no selling activity.

Miners’ optimism is also being fueled by institutional interest following the launch of exchange-traded products for Bitcoin in the U.S., which generated $17.71 billion in revenue as of July 29. Commenting on this pattern, Grumbach told crypto.news:

“Institutional investments are seen as validation of Bitcoin’s value and potential, leading to increased demand and price stability. Realizing this trend, miners are choosing to accumulate rather than sell, anticipating a more favorable market environment in the near future.”

Jonathan Hargreaves, head of global business development and ESG at Web3 firm Elastos, said he has observed a similar sentiment in his contacts in the mining sector, telling crypto.news today:

“Our merge miners and mining contacts are expressing a strong belief that the market is about to experience a significant bullish wave. As a result, they are all holding their positions until the market moves.”

However, the same cannot be said for smaller miners. The challenge of surviving in the post-halving market has been further complicated by the ever-increasing mining difficulty, which necessitates hardware upgrades to improve efficiency and therefore profitability.

As a result, smaller miners have been forced to sell some of their Bitcoin holdings in order to stay afloat. CryptoQuant’s head of research Julio Moreno also highlighted this trend yesterday on X. post.

Since #Bitcoin Small miners, which had shrunk by half, sold out; larger miners piled up.

This coincides with data reported by major publicly traded mining companies: higher reserves and some even buying Bitcoin. picture.twitter.com/E3j7IrcaVU

— Julio Moreno (@jjcmoreno) July 30, 2024

Some miners even had to stop their operations after the halving due to increased operational costs.

Loka Mining CEO and co-founder Andy Fajar Handika also told crypto.news today that this phenomenon is mainly observed in new mining companies that are “unprepared for the high volatility post-halving.”

Taxing market conditions have led some miners to turn to less competitive alternative markets, such as AI, where they can better utilize their existing infrastructure.

Bitcoin miners are rallying

However, as July comes to an end, the situation appears to be improving. According to a Bitfinex Alpha report published last week, Bitcoin miners have returned to profitability for the first time since the halving. This shift suggests that miners, having recovered from the post-halving stress, are switching to newer, more efficient machines, thus increasing their profit margins.

Bitcoin mining hashrate is also recovering after falling to levels seen during the 2021 China mining ban, according to crypto financial services platform Matrixport.

As Crypto.news previously reported, President Donald Trump’s ambitious plans to add BTC as a national reserve asset and his calls for the US to lead global Bitcoin production are acting as bullish catalysts for the mining sector.

In the current economic climate, firms like Marathon Digital Holdings have begun to build up their reserves. The mining giant added $100 million worth of Bitcoin to its stockpile in late July, demonstrating its confidence in the stability of the market.

Meanwhile, other top miners have also held onto their Bitcoin reserves, reflecting a broader pattern of asset accumulation among top players. According to a June report, mining firm Riot has not sold any Bitcoin since January, while CleanSpark has only sold a small portion of its holdings.

Loka Mining’s Handika predicted that miners will continue to accumulate and that he expects “limited selling pressure” near Bitcoin’s next all-time high.

According to Elastos’ Hargreaves, selling pressure will likely hit around $125,000 per Bitcoin, where he expects miners to begin “dollar-cost averaging” to make a profit. That’s an increase of about 86% from Bitcoin’s current price of $66,928 at the time of writing.

Regarding when this might happen, he said:

“The timing of this will depend on the pace of price growth – if [the price of Bitcoin] “If it gains momentum quickly, it could happen by the end of this year or extend into 2025.”

Green Mining DAO’s Grumbach also noted that Bitcoin’s recent trading volume has dwarfed the output from new mining, making it relatively insignificant, so he doesn’t expect any selling pressure from miners in the short term.