The decline in token values has prompted a pair of major Bitcoin miners to sell their BTC. Marathon Digital Holdings Inc. and Hut 8 Mining Corp. both applied for the option to sell company stock for cash with the Securities and Exchange Commission. The two are most likely attempting to remain flexible in the wake of Bitcoin’s precipitous drop, which may force a shakeout of miners with less efficient operations.
While Bitcoin is down approximately 38% from its all-time high in November, shares of Marathon and Hut 8 are still down more than 55% from their peaks. Hut 8 Mining filed a shelf registration on Friday for up to $65 million in common shares. Marathon, on the other hand, filed on Monday to offer up to $750 million in shares, preferred stock, warrants, and units.
The filings come as the sector grapples with cash flow issues, with some miners selling their Bitcoin holdings to invest in more powerful equipment or simply stay afloat.
However, simply going by this development could be a little deceptive. Let’s take a deeper dive.
Are miners actually selling off their Bitcoins?
According to Cryptoquant, the miners’ position index (MPI), reached 0.37941941951702995, which is a cautionary number to keep in mind. This is the highest MPI since April of 2021. However, as the MPI has not crossed the 1 mark, it is not a call for panic. 0.37, although significant, is still in the safe zone. If the number reaches somewhere between 1 and 2, it sure would be a sign of negative confidence in regards to the miners.
According to Delphi Digital, miners have been adding to their stocks for months, even while prices have fallen to $35,000. However, with Bitcoin still hovering 35% below its November all-time high, miners with expensive operations are under pressure to keep their cash balances in check while investing in more powerful equipment.
On the other hand, Bitcoin’s mining difficulty had reached an all-time high, breaking its previous record. According to data from Blockchain.com, the overall Bitcoin hashrate increased by 31.7 percent to an all-time high of 248.11 EH/s in raw numbers on Saturday.
This was a reflection of BTC’s commitment to security. Even though Bitcoin was on the decline, its security was at an all-time high. This is an important indicator to remember because it reflects the miner’s positive attitude about BTC. Despite the MPI reaching an ATH, a large number of miners are still active on the Bitcoin network.