Miners' Sell-Off Sparks Near-Term Supply Pressures for Bitcoin

Bitcoin miners are under increasing financial pressure due to restructuring efforts. This is causing them to cut both reserves and mining capacity, leading to a decline in their net positions from positive to negative.

The hash rate has dropped by approximately 21% since its peak as miners redirect infrastructure toward AI projects. Unlike China's 2021 ban, which caused a 41% decline, this contraction reflects an economic restructuring rather than forced shutdowns.

As a result of the reduction in both reserves and the hash rate, there are near-term supply pressures on top of weakening network computational capability. This is because miners' returns to circulation are adding supply while Bitcoin trades near the lower end of its 2026 range.