Top crypto miners capitalized on the surge in bitcoin prices last month, selling more tokens than they produced.
According to a post on crypto data portal The Miner Mag, 13 public bitcoin miners, including Hut 8 and Bit Digital, sold a total of 15,492 tokens worth $164 million.
As the amount sold was more than the number minted, the bitcoin liquidation-to-production ratio shot up to 104% in October from 70% over the summer, suggesting that miners reached into their own bitcoin stockpiles to unload tokens.
That came as bitcoin notched a 30% monthly gain that sent the price rocketing past $35,000 for the first time since 2022.
“While some of these companies consistently sell all of their mined bitcoin every month, others adopt a hybrid treasury strategy such as Marathon, Hut 8, Cipher, CleanSpark, Bit Digital – and it was them who liquidated more in October than in previous months,” the post stated.
Usually, miners sell minted coins to replenish their cash flows or take advantage of rallying crypto prices. Riding on a wave of optimism around an expected approval of a spot bitcoin ETF, prices surged to months-long highs. The currency is currently trading at $35,746, up 115% year-to-date.
Another possible reason why producers were cashing in on tokens is to get ahead of the next bitcoin halving in 2024. That’s when the reward for mining is cut in half, and miners may have been trying to dampen the upcoming blow by selling.
The sale of tokens helps with bitcoin supply in what’s currently a tight market. Last month, a Forex.com analyst warned that bitcoin may see a supply shock, with tradeable tokens on crypto exchanges at their lowest since 2018.