Bitcoin miners are proving to be a resilient bunch, HODLing through the tough times when revenue has been cut in half by a number of market factors. Recent data indicates that miners are accumulating Bitcoin, signaling a potential long-term bullish outlook even as their daily earnings have declined. How Bitcoin’s current strategic holding pattern may actually be its greatest strength. All of this comes on the heels of the most recent halving event, which has significantly increased pressure on miner profitability.

Revenue Decline and Market Impact

Combined with the price of BTC, Bitcoin miners saw a sharp decline in daily revenues on June 22, reaching their two-month low of $34 million. This decline is due to a combination of issues. The short answer is lower transaction fees, which have recently plummeted alongside Bitcoin’s price. The recent decrease in transaction fees reflects a decline in network usage. At the same time, the price decrease lowers the value that Bitcoin miners receive as block rewards.

Combined with the ongoing increase in overall network difficulty, this has continued to apply negative pressure on miners. They’re already being cooked by the halving event which gives them much lower block rewards. This event dramatically cuts in half the rewards miners receive for each newly mined block. In reality, it has made the entire mining community endure boom-and-bust cycles. The current economic climate is creating a tough cash crunch. This context makes their decision to maintain their reserves all the more impressive.

During this difficult period, miners have mostly resisted the urge to liquidate their Bitcoin assets. Taken together, this indicates a strategic choice to ride out a bear market in expectation of long-term price growth. Just as the activity of miners is examined as a leading indicator of bullish or bearish market sentiment and future price action, so too should the behavior of Hodlers.

Accumulation of Bitcoin Reserves

Remarkably, even with miners pulling in drastically less revenue overall, Bitcoin reserves held by miners are at their greatest accumulation since November of 2024. This heavy accumulation reflects a deeply bullish outlook from miners on the long-term value of Bitcoin. Miners’ reserves show a smart strategy of holding onto their assets, maybe even in expectation of a price increase.

Over the course of November 2024, Bitcoin miners experienced their reserves decrease to less than 71k BTC. This decrease occurred immediately following Bitcoin’s first-ever rise over $100,000. This either means a recent change in strategy, with miners increasingly choosing to accumulate rather than immediately profit-take. This represents a significant change of behavior, given that in the past miners would usually sell their assets on rallies.

It’s worth noting that the metric of Bitcoin reserves of miners has experienced some volatility. For the record, the reserves are down 3.5% since June 16, the biggest drop since July 2024. This release makes it clear that there is still significant selling pressure. The bigger story is that miners are continuing to hoard Bitcoin on a net basis.

Impact of Halving and Network Hashrate

The Bitcoin network hashrate, a measure of the computational power used to mine Bitcoin, saw a significant drop. In comparison, in July 2024, the hashrate dropped by 8.4%. Decreasing miner revenues post-halving is the key driver of this decrease. Block rewards dropped from 6.25 BTC to 3.125 BTC. The halving event is felt throughout the network, as it directly affects miner profitability and drives some miners to shut down their operations entirely if their margins are affected.

In addition to making mining unprofitable, the decreased hashrate can result in longer block times and thus directly undermine the network’s security. Cryptocurrency networks such as Bitcoin continuously retarget the mining difficulty. This helps to make sure that block times are steady and the network has no problems operating efficiently. This adjustment mechanism allows the network to adjust quickly to changes in hashrate, maintaining the security and stability of the network.

Miners haven’t observed a single day of high flow to exchanges all month since February. This new trend deepens the impression of their unwillingness to budge. Miners have responded by shifting their risk preferences. In the past, during peak periods of volatility they tended to liquidate a significant share of their inventory. The prevailing sentiment is definitely the latter, leaning towards the more parsimonious route, with miners focused on long-term accumulation rather than short-term profit.