As a plunge in prices, rising energy costs and increased competition bite into profitability, Bitcoin miners have been forced to tap into their cryptocurrency stashes.

Since June 7, the number of coins miners are sending to crypto exchanges has been steadily climbing, researchers at MacroHive noted, a signal that “miners have been increasingly liquidating their coins on exchanges.”

An analysis by Arcane Research found that several publicly listed bitcoin miners have collectively sold more than 100% of their entire output in May as the value of bitcoin tumbled 45%.

“The plummeting profitability of mining forced these miners to increase their selling rate to more than 100% of their output in May. The conditions have worsened in June, meaning they are likely selling even more,” said Arcane analyst Jaran Mellerud.

According to CoinMetrics data, Bitcoin miners who run networks of computers to earn tokens to validate transactions on the blockchain, are typically staunch crypto “HODLers” and collectively own around 800,000 bitcoins.

The crypto mining space expanded rapidly in 2021 as bitcoin more than quadrupled in value. However, this growth has further pressured margins as the process is designed to grow more difficult as the number of miners increases.

“Over the past six months, hash rate and mining difficulty have increased while the price of bitcoin has dropped. These are both negatives for existing miners as both work to compress margins,” said Joe Burnett, analyst at bitcoin mining firm Blockware Solutions.

According to the Cambridge Bitcoin Electricity Consumption Index, high energy prices are also hitting miners, which by some estimates use more electricity than the Philippines.

“If you’re not at a very low-cost electricity area at this point, you’ve got to shut down,” noted Chris Brendler, senior research analyst at D.A. Davidson.

Bitfarms’ chief executive officer said the company is “no longer HODLing daily bitcoin production.” with Bitfarms, Riot Blockchain and Core Scientific are among companies that announced sales.

Miner shares have suffered even more than bitcoin’s, with the Valkyrie Bitcoin Miners ETF falling 59% this quarter compared to 53% drop for bitcoin.

Several  miners, including Bitfarms, used proceeds to negotiate financing agreements to fund operations and make payments on expensive mining equipment.

Brendler said, if miners have already paid two-thirds or even 70% of the price of these millions of dollars in machines, they wouldn’t want to miss the final installments, making them desperate for financing.

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