Bitcoin’s “miners are dumping” story is reassuring in the way in which easy tales at all times are. Worth slides, miners run out of oxygen, cash hit exchanges, and the value is shoved round by a single, straightforward villain.
However miners should not a single actor, and promoting strain is not only a temper. It is math, contracts, and deadlines. When stress reveals up, what issues shouldn’t be whether or not miners wish to promote, however whether or not they need to, and the way a lot they will promote with out breaking the enterprise they’re attempting to maintain alive.
That’s why probably the most helpful means to consider a miner “capitulation” is as a thought experiment. Think about you’re working a mine proper now, in a market the place the hashrate ribbon flipped into inversion territory, and value trades under a tough, difficulty-based estimate for common all-in sustaining price, round $90,000.
On the identical time, whole miner holdings sit at round 50,000 BTC: not small by any measure, however not bottomless both.
Now you’ve bought a easy query that sounds dramatic. If value sits under the common AISC line for some time, what number of cash are you able to push out over 30 to 90 days earlier than lenders, energy contracts, and your individual working actuality push again?
AISC is a shifting goal, not a single quantity
All-in sustaining price, or AISC, is crypto’s borrowed time period from mining and commodities, however it earns its preserve as a result of it forces you to cease pretending electrical energy is the one invoice. AISC is principally a quantity that determines whether or not you may keep in enterprise. Not “can you retain the machines on as we speak,” however “can you retain the operation wholesome sufficient that it nonetheless exists subsequent quarter.”
You possibly can consider Bitcoin miners’ AISC as having three layers, even when totally different analysis outlets draw the boundaries in another way.
The primary layer is the one everybody understands: direct working money prices. Electrical energy sits on the middle of it, as a result of the meter runs whether or not you’re feeling bullish or not. Add internet hosting charges (if you happen to don’t personal your website), repairs, pool charges, community ops, and the individuals who preserve the power from turning into an costly house heater.
The second layer is the one the memes skip: sustaining capex. This is not progress capex: sustaining capex is the cash you spend to cease your fleet from slowly dying. Followers fail, hashboards degrade, containers rust, and, extra importantly, the community will get harder. Even when your machines are tremendous, you may lose a share of the pie if everybody else upgrades and also you don’t.
That’s the place issue is available in. Bitcoin adjusts mining issue so blocks preserve arriving roughly on schedule. When hashrate rises, issue ratchets up, and the identical machine earns fewer BTC for a similar power burn.
When hashrate falls, issue can ease, and the remaining miners get a barely higher chunk. The AISC framing we’re utilizing is explicitly based mostly on issue, which is a clear approach to seize this shifting goal without having each miner’s personal energy contract.
The third layer is what turns stress into compelled habits: company prices and financing. A non-public operator would possibly care principally about energy and upkeep. A public miner with debt cares about curiosity funds, covenants, liquidity buffers, and the power to refinance.
For this reason AISC modifications over time in a means that makes single-number debates really feel foolish. It modifications when issue modifications, and when the fleet combine modifications (older machines get pushed out, newer ones are available).
It modifications when the ability surroundings modifications, particularly for miners uncovered to identify pricing, and it modifications when capital prices change, which is why a miner can look steady at one level within the cycle and fragile at one other with the identical hash output.
So when value dips under a median AISC estimate like ~$90,000, it does not imply the entire community is immediately underwater, simply that the middle of mass is uncomfortable. Some miners are tremendous, some are pinched, and a few are in triage. The stress is actual, however the response is uneven, and that unevenness is what retains the “everybody dumps without delay” from being the default consequence.
There’s one more reason the default consequence isn’t a dump. Miners have extra levers than simply promoting their BTC: they will shut down marginal machines, curtail for grid funds, roll hedges, and renegotiate internet hosting phrases. And, as beforehand lined by CryptoSlate, many now have aspect companies tied to AI data-centers, which may buffer a foul mining month.
That will get us to the actual query, which is when stress is on, how a lot promoting is structurally required?
The dump math: what could be bought with out breaking the enterprise
Begin with the one stream the protocol palms you, whether or not you’re completely satisfied about it or not. Put up-halving, new BTC issuance from the block subsidy is about 450 BTC per day, which is about 13,500 BTC per 30 days.
If miners bought 100% of recent issuance, that’s the clear ceiling for stream promoting. In actuality, miners don’t coordinate, and never all of them have to promote every part they mine. However as a thought experiment, 450 BTC/day is the utmost new provide that may hit the market with out touching any pre-existing stock.
Now usher in stock, as a result of that’s what the scary headlines level at. We’ll depend on Glassnode’s estimate that miners have round 50,000 BTC readily available. A 50,000 BTC stockpile sounds massive till you flip it right into a time sequence. Unfold throughout 60 days, 10% of that stock is 5,000 BTC, which is about 83 BTC/day. Unfold throughout 90 days, 30% is 15,000 BTC, which is about 167 BTC/day.
That’s the essential form of miner compelled distribution in a stress window: stream promoting does many of the work, and stock promoting provides a smaller however nonetheless significant quantity, except the stress is extreme sufficient that stock turns into the first device.
So let’s put three value paths below the toy mannequin: $90,000, $80,000, $70,000. Then tie them to a few middle-ground regimes that map to how miners behave when margins get skinny.
Within the base case, miners promote half of the issuance and contact no stock. That’s 225 BTC/day. Over 60 days, that’s 13,500 BTC of issuance in whole occasions 50%, so 6,750 BTC. Over 90 days, 10,125 BTC.
In a conservative stress case, miners promote 100% of issuance and in addition promote 10% of stock over 60 days. That’s 450 BTC/day from issuance plus 83 BTC/day from stock, about 533 BTC/day whole.
In a extreme stress case, miners promote 100% of issuance and promote 30% of stock over 90 days. That’s 450 plus 167, about 617 BTC/day.
| Worth (USD/BTC) | Horizon (days) | Issuance bought % | Treasury faucet % | Issuance bought (BTC) | Treasury bought (BTC) | Whole bought (BTC) | Avg BTC/day | Avg USD/day | ETF equiv @ $500M (BTC) | Miner vs ETF (BTC/day) |
|---|---|---|---|---|---|---|---|---|---|---|
| 90,000 | 60 | 25% | 10% | 6,750 | 5,000 | 11,750 | 195.8 | 17,625,000 | 5,556 | 195.8 vs 5,556 |
| 90,000 | 60 | 25% | 30% | 6,750 | 15,000 | 21,750 | 362.5 | 32,625,000 | 5,556 | 362.5 vs 5,556 |
| 90,000 | 60 | 50% | 10% | 13,500 | 5,000 | 18,500 | 308.3 | 27,750,000 | 5,556 | 308.3 vs 5,556 |
| 90,000 | 60 | 50% | 30% | 13,500 | 15,000 | 28,500 | 475.0 | 42,750,000 | 5,556 | 475.0 vs 5,556 |
| 90,000 | 60 | 100% | 10% | 27,000 | 5,000 | 32,000 | 533.3 | 48,000,000 | 5,556 | 533.3 vs 5,556 |
| 90,000 | 60 | 100% | 30% | 27,000 | 15,000 | 42,000 | 700.0 | 63,000,000 | 5,556 | 700.0 vs 5,556 |
| 90,000 | 90 | 25% | 10% | 10,125 | 5,000 | 15,125 | 168.1 | 15,125,000 | 5,556 | 168.1 vs 5,556 |
| 90,000 | 90 | 25% | 30% | 10,125 | 15,000 | 25,125 | 279.2 | 25,125,000 | 5,556 | 279.2 vs 5,556 |
| 90,000 | 90 | 50% | 10% | 20,250 | 5,000 | 25,250 | 280.6 | 25,250,000 | 5,556 | 280.6 vs 5,556 |
| 90,000 | 90 | 50% | 30% | 20,250 | 15,000 | 35,250 | 391.7 | 35,250,000 | 5,556 | 391.7 vs 5,556 |
| 90,000 | 90 | 100% | 10% | 40,500 | 5,000 | 45,500 | 505.6 | 45,500,000 | 5,556 | 505.6 vs 5,556 |
| 90,000 | 90 | 100% | 30% | 40,500 | 15,000 | 55,500 | 616.7 | 55,500,000 | 5,556 | 616.7 vs 5,556 |
| 80,000 | 60 | 25% | 10% | 6,750 | 5,000 | 11,750 | 195.8 | 15,666,667 | 6,250 | 195.8 vs 6,250 |
| 80,000 | 60 | 25% | 30% | 6,750 | 15,000 | 21,750 | 362.5 | 29,000,000 | 6,250 | 362.5 vs 6,250 |
| 80,000 | 60 | 50% | 10% | 13,500 | 5,000 | 18,500 | 308.3 | 24,666,667 | 6,250 | 308.3 vs 6,250 |
| 80,000 | 60 | 50% | 30% | 13,500 | 15,000 | 28,500 | 475.0 | 38,000,000 | 6,250 | 475.0 vs 6,250 |
| 80,000 | 60 | 100% | 10% | 27,000 | 5,000 | 32,000 | 533.3 | 42,666,667 | 6,250 | 533.3 vs 6,250 |
| 80,000 | 60 | 100% | 30% | 27,000 | 15,000 | 42,000 | 700.0 | 56,000,000 | 6,250 | 700.0 vs 6,250 |
| 80,000 | 90 | 25% | 10% | 10,125 | 5,000 | 15,125 | 168.1 | 13,450,000 | 6,250 | 168.1 vs 6,250 |
| 80,000 | 90 | 25% | 30% | 10,125 | 15,000 | 25,125 | 279.2 | 22,333,333 | 6,250 | 279.2 vs 6,250 |
| 80,000 | 90 | 50% | 10% | 20,250 | 5,000 | 25,250 | 280.6 | 22,450,000 | 6,250 | 280.6 vs 6,250 |
| 80,000 | 90 | 50% | 30% | 20,250 | 15,000 | 35,250 | 391.7 | 31,333,333 | 6,250 | 391.7 vs 6,250 |
| 80,000 | 90 | 100% | 10% | 40,500 | 5,000 | 45,500 | 505.6 | 40,500,000 | 6,250 | 505.6 vs 6,250 |
| 80,000 | 90 | 100% | 30% | 40,500 | 15,000 | 55,500 | 616.7 | 49,333,333 | 6,250 | 616.7 vs 6,250 |
| 70,000 | 60 | 25% | 10% | 6,750 | 5,000 | 11,750 | 195.8 | 13,708,333 | 7,143 | 195.8 vs 7,143 |
| 70,000 | 60 | 25% | 30% | 6,750 | 15,000 | 21,750 | 362.5 | 25,375,000 | 7,143 | 362.5 vs 7,143 |
| 70,000 | 60 | 50% | 10% | 13,500 | 5,000 | 18,500 | 308.3 | 21,583,333 | 7,143 | 308.3 vs 7,143 |
| 70,000 | 60 | 50% | 30% | 13,500 | 15,000 | 28,500 | 475.0 | 33,250,000 | 7,143 | 475.0 vs 7,143 |
| 70,000 | 60 | 100% | 10% | 27,000 | 5,000 | 32,000 | 533.3 | 37,333,333 | 7,143 | 533.3 vs 7,143 |
| 70,000 | 60 | 100% | 30% | 27,000 | 15,000 | 42,000 | 700.0 | 49,000,000 | 7,143 | 700.0 vs 7,143 |
| 70,000 | 90 | 25% | 10% | 10,125 | 5,000 | 15,125 | 168.1 | 11,766,667 | 7,143 | 168.1 vs 7,143 |
| 70,000 | 90 | 25% | 30% | 10,125 | 15,000 | 25,125 | 279.2 | 19,542,500 | 7,143 | 279.2 vs 7,143 |
| 70,000 | 90 | 50% | 10% | 20,250 | 5,000 | 25,250 | 280.6 | 19,642,000 | 7,143 | 280.6 vs 7,143 |
| 70,000 | 90 | 50% | 30% | 20,250 | 15,000 | 35,250 | 391.7 | 27,417,500 | 7,143 | 391.7 vs 7,143 |
| 70,000 | 90 | 100% | 10% | 40,500 | 5,000 | 45,500 | 505.6 | 35,392,000 | 7,143 | 505.6 vs 7,143 |
| 70,000 | 90 | 100% | 30% | 40,500 | 15,000 | 55,500 | 616.7 | 43,167,500 | 7,143 | 616.7 vs 7,143 |
These are the upper-bound sketches that reply a narrower query: what does the market permit?
To know how a lot the market would discover, we’ll use the only comparator readers already perceive: ETF stream days, measured in BTC-equivalent. ETF outflows are solely round 2.5% of BTC-denominated AUM, about $4.5 billion, and CryptoSlate beforehand described them as extra technical than conviction-driven. You don’t even have to litigate motive to make use of the comparability, as a result of the purpose is scale.
At $90,000 per coin, a $100 million day is about 1,111 BTC. At $80,000, it’s 1,250 BTC. At $70,000, it’s about 1,429 BTC. Instantly, the miner numbers look much less like a monster below the mattress and extra like one thing you may place on the identical shelf as flows the market digests on a regular basis.
A extreme miner distribution sketch, say 600 BTC/day, is roughly half of a $100 million ETF day at $90,000. That may nonetheless transfer value if it’s dumped into skinny books, or if liquidity is fragile on a weekend, or if it clusters into a couple of ugly hours. However the brute-force story of miners flooding the market runs into two ceilings: the issuance and the finite stock that miners are prepared and in a position to liquidate.
There’s additionally the execution element that issues greater than individuals need it to. A whole lot of miner promoting shouldn’t be a market order slapped into the general public order e-book. It may be routed by way of OTC desks, structured as ahead gross sales, or dealt with as a part of broader treasury administration. That does not erase promoting strain, however it modifications the way it prints on the tape. When individuals count on a visual waterfall and get a gradual grind, the impact available on the market is dampened.
So what would flip this from an orderly drip into one thing uglier? It could actually require extra than simply the value dropping under ASIC. The set off is when the financing layer takes over the choice. If a miner must defend a liquidity minimal, meet collateral phrases, or deal with a refinancing wall in dangerous market circumstances, then stock turns from non-obligatory to needed.
That’s the sober reply to the viral query. Even when stress is on, and the ribbon is inverted, there are actual limits to what miners can dump in a month or 1 / 4. If you’d like a sensible ceiling, the thought experiment retains pulling you again to the identical zone: a couple of hundred BTC per day in gentle stress, and one thing like 500 to 650 BTC per day in harsh stress home windows that embrace stock faucets, with the precise quantity hinging on energy phrases and debt constraints you may plug in later.
And if you happen to’re attempting to guess what strikes the tape, the punchline is annoyingly unromantic. The market tends to care much less in regards to the narrative label on a vendor and extra in regards to the cadence, the venue, and the encircling liquidity. Miners can add weight to a down week, however the concept that they’ve an infinite trapdoor below value doesn’t survive contact with the steadiness sheet.
