In June, Bitfarms, a cryptocurrency-mining firm, sold 3,352 Bitcoins (BTC -2.46%), almost half of the Bitcoins it held at the time. This may appear to be a drop in the bucket when you consider that more than 19 million Bitcoins have already been mined. But it’s not as simple as that.

Bitcoin’s value has shot up considerably during the previous several years, owing to a supply-demand imbalance. And this imbalance was aided by miners like Marathon Digital, Bitfarms, Riot Blockchain, and others. It could also cause the price of Bitcoin to drop even more if Bitfarms’ plan to sell becomes widespread.

Why you should watch Bitcoin miners

It cost Bitfarms roughly $8,700 in the first three months of 2022 to mine one Bitcoin. The value of Bitcoin has decreased by more than 70% since its peak. Despite this fall, however, Bitfarms maintains a healthy gross margin given the cost of mining.

However, there’s a catch. Bitfarms does not accumulate costs that can be paid in bitcoin. Its expenses are settled in fiat currency. The same may be said for Riot Blockchain and Marathon Digital. While the profit margins appear to be ideal in principle, they must figure out how to obtain legitimate money from the government somehow.

In recent years, the major Bitcoin miners have had simple access to funding to pay their expenses. As a result, as bitcoin bulls, they’ve been keeping the Bitcoins they’ve mined since then. Marathon Digital, for example, hasn’t sold a single Bitcoin since October 2020 and has 9,941 on hand.

It’s getting increasingly difficult to obtain financing. The stock market has taken a beating. Interest rates have gone up. And numerous cryptocurrency firms are failing every day, including Bitfarms, Marathon Digital, and Riot Blockchain, which each need millions of dollars in operational spending each quarter. To compensate for its high operating costs, miner Bitfarms must raise cash from somewhere. That’s how it works for Bitfarms: it sells more than half of its Bitcoins in order to survive.

Riot Blockchain is one of the newest bitcoin sellers in the market, although on a smaller scale. The business began selling some of its Bitcoin in March and has continued to do so every month since then. However, because the firm still stores a portion of the Bitcoin it mines every month, its reserves have grown to 6654 Bitcoins as of June 30.

The large Bitcoin miners kept almost all of the Bitcoins they created over the previous several years, resulting in restricted circulation. Demand from investors and firms began to grow, and the price rose as a consequence. Miners had a crucial role in creating the supply-and-demand imbalance.

If miners become net sellers of Bitcoin, this trend may change course. Marathon Digital, for example, has $86 million in total liquidity as of June 1 and millions in quarterly operating costs. That money must originate from somewhere. The firm might also opt to sell its bitcoins.

If Bitcoin miners become net sellers, the supply-and-demand imbalance could reverse, and prices may fall even more. Personally, I’m still bullish on Bitcoin’s long-term prospects. That said, liquidity for Bitcoin miners is a genuine concern that merits attention.