Bitcoin miner Riot Platforms sold 3,778 Bitcoin in the first quarter, adding to a recent wave of sales by crypto firms amid tough market conditions.
The Bitcoin (BTC) was sold at an average price of $76,626, netting Riot $289.5 million, according to the miner’s operational update released on Thursday. Bitcoin was trading at $66,867 as of Friday.
The miner produced 1,473 Bitcoin for the quarter and had 15,680 coins on its books at the end of Q1. Blockchain intelligence platform Arkham also flagged a 500 Bitcoin outflow from a wallet it attributed to Riot Platforms on Thursday.
It adds to a number of crypto miners and firms that have sold Bitcoin in recent months. In the last week, companies including MARA Holdings, Genius Group and Nakamoto Holdings revealed they had sold a combined 15,501 Bitcoin, with the lion’s share coming from MARA.
Kadan Stadelmann, a blockchain developer, investor and co-founder of AI company Compance, said miners are selling due to rising energy costs, which have worsened because of the war in the Middle East.
“Miners are selling off Bitcoin due to increasing energy costs, highlighted by the ongoing oil price shock, which represents one of the main costs of mining Bitcoin. As energy costs rise, the miners are forced to sell off their Bitcoin in an attempt to cover their operational costs.”
The Middle East conflict, which escalated in February, has driven oil prices higher while pushing cryptocurrencies and broader markets lower.
Less efficient miners are turning off rigs
Stadelmann said that less efficient miners are going offline because of mounting costs and predicted further capitulation, leaving larger operators to pick up the slack.
“This leads to a fall in hashrate and difficulty in Bitcoin mining. This makes it easier and more profitable to mine Bitcoins for those miners who remain online,” he told Cointelegraph.
The Bitcoin mining difficulty dropped on March 20 from around 145 trillion to 133 trillion, while the hash rate has also dropped since the start of the month from 1.16 zettahash to around 990 exahash as of Friday, according to CoinWarz.
However, Stadelmann also said a potential drop in energy prices and an increase in Bitcoin’s price could see less efficient miners return.
“Hashrate and difficulty could increase if efficient miners expand their operations as a result of the friendlier mining environment, possibly through investments in hardware or acquisitions of other miners. Alternatively, energy prices could decline, leading to the return of less efficient miners,” he added.