Bitcoin Miners Dumping Spree Continues: CryptoCompare Report

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The crippling impact of the May and June crash on Bitcoin miners lingers. New data has revealed that August recorded the fourth consecutive month that saw negative net miner flows.

Bitcoin miners had to resort to selling to sustain themselves throughout August, seeing a net outflow of 21.3k BTC. The only month miners accumulated BTC this year was April, according to the latest edition of CryptoCompare’s Asset Report.

Bitcoin miners in distress

The price of the world’s largest cryptocurrency stayed below $24,000 for most of August and even traded below $20,000 for a few weeks which, in addition to a high hash rate which rose 5.28% to 212 million TH/s, forced miners to offload their tokens.

Bitcoin miners have continued to take advantage of the few small rises of the past few months to earn profits as the fallout from this year’s devastating crash doesn’t seem to be fading anytime soon.

Public miners had managed to accumulate a huge reserve of BTC after the incredible bull run of 2021. But with the recent market downturn, these entities are quickly running out of coins to sell.

August was a tough month for several Bitcoin mining companies, including Stronghold, which recently revealed that it had reached an agreement with lender New York Digital Investment Group (NYDIG) and a broker to return approximately 26,200 mining machines in exchange for the cancellation of $67.4 million in debt.

Bitcoin network activity sees mild recovery

While miner data showed a grim picture, network activity saw a modest recovery. Bitcoin transaction volume, for its part, rose 10.5% to $2.39 trillion. CryptoCompare also observed an increase in the number of active addresses by 4.47% to 916,000, while the number of new addresses increased by 3.10% to 395,000.

Even as the number of transactions increased by 1.80% to 7.82 million, monthly fees fell by 27.0% to 410 BTC, causing average transaction fees to drop by 28.2% to 5,190 Satoshis.

Lower transaction fees coupled with an increase in transactional activity can be attributed to the increased use of Layer 2 scaling solutions such as Lightning Network (LN). In August, total value locked (TVL) in the Lightning Network rose 12.0% to $3.16 billion, recording its first increase in five months.

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