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The sell-off of Bitcoin is a way for companies to maintain their balance sheet.
In a move to offset their mining expenses, bitcoin mining companies have moved over $300 million worth of Bitcoin within twenty-four hours. The data from CryptoQuant showed that over 14,000 bitcoins were sold at the end of the past week.
While exiting such large positions could have caused even more panic in the market, it did not. Instead, the price of bitcoin rallied by over 5%. At the time of writing, Bitcoin was trading at $22,083, according to CoinMarketCap.
With the growing market volatility, Bitcoin mining companies may very well be under pressure. Bitcoin alone has dipped by about 70% of its peak value of $69,000. Citi analyst, Joseph Ayoub, shared similar thoughts in his note. He realized the cost of mining may exceed the price of Bitcoin for some miners, making it unwise to continue.
Consequently, the sell-off of Bitcoin is a way for the companies to maintain their balance sheet. CEO of crypto mining company Core Scientific, Mike Levitt, also affirmed that crypto miners had bills to pay too. The firm sold off over 7000 bitcoins at an average of $23,000.
According to Levitt, despite the profitability, the expenses were taking a chunk off it. Levitt noted it would use funds from its bitcoin sale to buy ASIC serves, design data centres, repay debts, and settle employee grants.
That said, Levitt noted the company would benefit significantly from any rise in the price of bitcoin. More so, he pointed out that the system profitability was more now that less-efficient miners had been driven out of the market by the market conditions.
Demand Energy Usage Report from Bitcoin Mining Companies
Meanwhile, a group of US lawmakers has called on the government to intervene and monitor energy usage. The group stated that the intervention was to limit the impact of bitcoin mining on the environment.
“Our investigation suggests that the overall US crypto mining industry is likely to be problematic for energy and emissions,” they said. The Democrat reps believe it would not be possible to know the adverse effect of crypto mining on the environment until the report on energy usage was taken.