Marathon leads the coin selling, is a wave of miner sell-offs coming?

A widely cited data shows that since October 9, about 51,000 bitcoins have been transferred from miner wallets to Binance.

Written by: Gino Matos

Translated by: Luffy, Foresight News

Marathon's third-quarter financial report reveals a clear policy shift. The company announced that from now on, it will sell part of the newly mined bitcoin to support its operational funding needs.

This shift occurred on September 30, when MARA held about 52,850 bitcoins. The electricity cost at its own mining farms was about $0.04 per kilowatt-hour. Due to the rising difficulty of the bitcoin network, the energy cost to mine each bitcoin in the third quarter was about $39,235.

In this quarter, bitcoin transaction fees accounted for only 0.9% of mining revenue, highlighting the sluggish growth in fees. Since the beginning of this year, Marathon has had significant cash outflows: about $243 million for property and equipment purchases, $216 million in prepayments to suppliers, and $36 million for wind power asset acquisitions. All these expenditures were covered by $1.6 billion in financing and self-owned funds.

Now, actual capital expenditures and liquidity needs coexist with the sluggish economic benefits of hash power. The timing of this shift is crucial: the entire mining industry is under increasing pressure, and miners may join the wave of sell-offs triggered by ETF redemptions.

The impact varies among different mining companies, but Marathon's clear shift from "pure hoarding" to "strategic monetization" provides a template for the industry: when profit margins are squeezed and high capital commitments meet, this is a possible response for mining companies.

Profit Margin Compression: Miners Become Active Sellers

In November, industry profitability tightened. This week, hash price fell to a multi-month low, about $43.1 per exahash, due to bitcoin price declines, persistently low transaction fees, and a continuously rising hash rate.

This is a typical profit margin compression pattern. Revenue per unit of hash power decreases while hash rate increases, but fixed costs such as electricity and debt repayment remain unchanged.

For mining companies unable to obtain cheap electricity or external financing, the easiest option is to sell bitcoin rather than hold and wait for prices to rebound.

The key trade-off lies in cash reserves and operating costs. Hoarding only makes sense when bitcoin appreciates faster than the opportunity cost of "selling bitcoin to pay for capital expenditures or repay debt."

When hash price falls below "cash cost + capital needs," hoarding becomes a gamble—betting that prices will rebound before liquidity runs out. Marathon's policy shift indicates that, at current profit margins, this bet is no longer profitable.

The potential risk is: if more mining companies follow the same logic and monetize bitcoin to fulfill commitments, the supply flowing into exchanges will further increase market selling pressure.

Differentiation Among Mining Companies

So, what about other bitcoin mining companies?

Riot Platforms set a record with $180.2 million in third-quarter revenue and strong profitability, while launching a new 112 MW data center project. This is a capital-intensive project, but with flexible options on its balance sheet, the company can ease the pressure to passively sell bitcoin.

CleanSpark disclosed in its first fiscal quarter that its marginal cost per bitcoin was about $35,000. In October, the company sold about 590 bitcoins, earning about $64.9 million, while increasing its bitcoin holdings to about 13,033 coins. This is "active capital management," not large-scale selling.

Hut 8 reported third-quarter revenue of about $83.5 million and a positive net profit, while noting that mining companies in the industry are facing complex mixed pressures.

This differentiation reflects differences among mining companies in "electricity costs, financing channels, and capital allocation philosophies." Mining companies with electricity costs below $0.04 per kilowatt-hour and ample equity or debt financing capacity can withstand the impact of profit margin compression without relying on bitcoin sales.

Those paying market electricity prices or facing high short-term capital expenditures, however, face different decision considerations. The impact of transitioning to artificial intelligence on future selling pressure is two-sided: on one hand, long-term computing contracts (such as IREN's five-year $9.7 billion contract with Microsoft, including a 20% prepayment, and a $5.8 billion equipment contract with Dell) can create non-bitcoin revenue streams and reduce reliance on selling coins; on the other hand, these contracts require huge short-term capital expenditures and working capital, so monetizing hoarded coins remains a flexible way to manage funds during this period.

Capital Flow Data Confirms Risks

CryptoQuant data shows that from mid-October to early November, miner transfers to exchanges increased.

A widely cited data shows that since October 9, about 51,000 bitcoins have been transferred from miner wallets to Binance. While this does not prove that miners have sold immediately, it does increase short-term supply pressure. Combined with ETF capital flows, the scale is significant.

CoinShares' latest weekly report shows that crypto exchange-traded products (ETPs) saw net outflows of about $360 million, with bitcoin products seeing net outflows of about $946 million, while Solana-related products saw strong capital inflows.

At a bitcoin price of $104,000, a $946 million net outflow is equivalent to more than 9,000 bitcoins, roughly equal to three days of post-halving mining output. If listed mining companies increase selling in a given week, it will significantly intensify market selling pressure.

The direct impact is: miner selling and ETF redemption pressure are superimposed. ETF outflows reduce market demand, while miner transfers to exchanges increase market supply.

When both move in the same direction, the net effect is tighter liquidity, which may accelerate price declines; and falling prices further compress miner profit margins, triggering more selling and creating a vicious cycle.

The Key to Breaking the Vicious Cycle

There are structural limits: miners cannot sell bitcoin they have not mined, and the daily issuance after the halving is capped.

Based on the current network hash rate, total daily miner output is about 450 bitcoins. Even if all miners monetize 100% (which is unlikely), there is an absolute cap on capital flows.

The core risk lies in "concentrated selling": if large hoarding miners decide to reduce their bitcoin inventory (rather than just selling new output), market supply pressure will rise sharply.

Marathon's 52,850 bitcoins, CleanSpark's 13,033 bitcoins, and the hoards of Riot, Hut 8, and other miners represent months of accumulated mining output. In theory, if liquidity needs or strategic shifts require it, these bitcoins could all be sold on exchanges.

The second key factor is "recovery speed." If hash price and fee ratios rebound, miners' economic benefits could quickly improve.

Miners who survive the profit margin compression period will benefit, while those who sell bitcoin at the profit margin trough will suffer losses. This asymmetry encourages miners to avoid passive selling as much as possible, provided their balance sheets can withstand the cash burn during the transition period.

The current key is: will profit margin compression and high capital commitments drive enough miners to actively sell bitcoin, thereby significantly intensifying the downward pressure from ETF redemptions; or will stronger miners survive the profit margin compression period and complete financing without selling bitcoin?

Marathon's clear policy shift is the strongest signal so far: even large, well-funded miners are willing to strategically sell mined bitcoin when economic benefits tighten.

If hash price and fee ratios remain sluggish, while electricity costs and capital expenditures stay high, more miners will follow—especially those unable to obtain cheap electricity or external financing.

Continued capital inflows from miners to exchanges, and any acceleration in the selling of existing bitcoin, are "additional selling pressure" during ETF outflows. Conversely, if capital flows reverse and fees rebound, market pressure will quickly ease.