The public miners dumped their bitcoin holdings in June
In June, the public miners sold almost 25% of their bitcoin holdings at fire-sale prices. This article analyzes the public miners' recent bitcoin sales and predicts if they will keep selling in the coming months.The public miners only sold between 20% and 40% of their bitcoin production from January to April this year, as most of them strived to keep the produced bitcoin as part of their "hodl-at-any-cost" strategy.This strategy worked until the bitcoin price plunged from $40k to $30k in May. The bitcoin price decline spurred financial difficulties that forced the miners to start liquidating their precious bitcoin holdings, and May was the first month where they sold more than 100% of their production.Many were shocked by the public miners' massive bitcoin sales in May, but in June, they sold about 14,600 bitcoin – almost four times as much as in May. The public miners only produced 3,900 bitcoin this month, meaning they sold almost 400% of their production, ultimately draining their bitcoin holdings by nearly 25%.Core Scientific and Bitfarms sold the most bitcoin
Some miners sold most of their bitcoin holdings in May and June, while others managed to hold onto their coins. As shown in the chart below, Core Scientific has been the largest bitcoin seller by far, dumping almost 10,000 bitcoin in May and June. Core Scientific started selling in May but stepped up in June when they sold more than 7,000 bitcoin.Source: Monthly production updates Bitfarms has been the second-largest bitcoin seller during this bear market, selling 3,353 bitcoin in June. The German company Northern Data is the third-largest seller after dumping the entirety of its bitcoin and ether holdings in May and June. Later in the article, we will dig into what forced these companies to sell.Marathon and Hut 8 now hold the most bitcoin after not selling in May and June
While some public miners have been dumping most of their bitcoin holdings, others have still not sold any bitcoin. Marathon has so far avoided selling and is now the biggest hodler with 10,055 bitcoin on their balance sheet, followed by Hut 8 with 7,405 bitcoin. Riot takes third place with 6,654 bitcoin after selling slightly more than usual, but not nearly to the same extent as Core Scientific and Bitfarms.Source: Monthly production updates During the good old mining times of 2021 and the beginning of 2022, Core Scientific could keep most of its bitcoin production by tapping into capital markets to pay for expenses. This allowed them to build the previously largest bitcoin treasury by any public mining company at more than 10,000 bitcoin.Core Scientific now only holds 1,959 bitcoin after their massive May and June sales, meaning their bitcoin treasury has dropped all the way down to the sixth place. Core Scientific is still by far the biggest company by hashrate, regularly producing around 1,000 bitcoin per month. Their massive bitcoin production means they will likely climb on this ranking in the coming months unless they decide to change their treasury strategy after getting burned by the "hodl-at-any-cost" strategy.Why have the public miners been dumping their bitcoin holdings?
Most miners have increased their bitcoin sales recently to free up liquidity on their balance sheet, as they need dollars to pay for upcoming infrastructure upgrades and machine deliveries. In 2021 they were able to raise equity or debt to pay for these expenses, but recently miners' access to external capital has drastically weakened due to a lethal combination of increasing interest rates and less investor interest in bitcoin. The dried-up capital markets mean these companies increasingly need to fund their operations with their own liquid capital, which mostly consists of saved-up bitcoin.The weakening capital markets impact all the public miners and don't explain why specific miners like Core Scientific and Bitfarms have sold so much compared to the others. To find out why we must look at the structures of their balance sheets. Core Scientific and Bitfarms had among the most significant bitcoin and machine collateralized debt positions. The plummeting bitcoin and machine prices forced these companies to sell bitcoin to pay off these loans.Source: Q2 2022 financial reports The chart above shows the public miners' bitcoin and machine collateralized debt positions on March 31st, 2022. We see that Core Scientific and Bitfarms were by far the companies with most of this debt, and coincidentally they have also been the biggest bitcoin sellers during this bear market. We also see that Marathon, CleanSpark, and Riot, which have not sold as much bitcoin, didn't have any bitcoin or machine collateralized debt before this bear market started.Bitfarms published a June press release explaining why they sold 3,000 bitcoin. The company used the proceeds to pay down bitcoin and machine collateralized debt. Especially their bitcoin collateralized credit facility with Galaxy Digital became problematic, as the falling bitcoin price forced them to sell bitcoin to repay the loan. You can read more about it in this article.Will the public miners continue to dump their bitcoin?
The chart below shows how the public miners built up their bitcoin holdings during the first months of 2022 before selling a large chunk of it in June. They sold so much bitcoin this month that their total bitcoin holdings are now at the same level as when the year started.Source: Monthly production updates I think we have now been through the worst bitcoin selling from the public miners. They will keep selling a larger share of their production than they did in the first months of 2022 due to decreased access to external capital, but the extreme bitcoin sales we saw in June will not persist.There are two reasons why I believe miners will not keep dumping their bitcoin. Firstly, the miners have less bitcoin to sell now than they did at the beginning of June. Their bitcoin holdings shrunk by almost 11,000 in June. This 23% reduction mainly came from Core Scientific and Bitfarms dumping their holdings. Some miners, like Marathon and Hut 8, still have massive amounts of bitcoin on their balance sheets that they could sell, but if they haven't dumped their holdings yet, they will likely not need to unless the bitcoin price drops further.The second reason I believe we have been through the worst miner selling is that what caused the worst miner selling – bitcoin and machine collateralized debt – has now been drastically reduced. The worst risk has been flushed out of the system. 
