Marathon’s third-quarter filing included a quiet but decisive policy change, in which the company said it would sell some of its newly mined Bitcoin (BTC) to fund its operations.
The change comes as MARA held approximately 52,850 BTC on September 30th, paid approximately $0.04 per kilowatt-hour on its owned sites, and recorded a purchased energy cost of approximately $39,235 per Bitcoin in the third quarter when network difficulties increased.
Transaction fees contributed only 0.9% to mining revenue in the quarter, confirming the weak tailwind from fees. Year-to-date, cash usage has been high, with approximately $243 million allocated to property, plant and equipment, $216 million in advance payments to vendors, and $36 million in wind energy asset purchases, all financed with $1.6 billion in financing.
Real capital expenditures and liquidity needs now coexist with a declining hash economy.
Timing is critical as pressure is building across mining cohorts and the elements are in place for miners to further the same sell-side impulse seen in ETF redemptions.
Although the effects are not uniform across operators, Marathon’s clear pivot from pure accumulation to tactical monetization provides a template for what happens when margin pressure is matched by increased capital commitments.
Margin compression turns miners into active sellers
Industry profitability deteriorated in November. Hashprice fell this week to a multi-month low of around $43.1 per petahash/second, as Bitcoin prices fell, fees remained subdued, and hashrate continued to rise.
This is a typical margin compression pattern. Revenue per unit of hash decreases, while the competitive denominator increases, while fixed costs such as electricity and debt service remain constant.
For miners without access to cheap electricity or external financing, the path of least resistance is to sell rather than retain a larger share of production and hope prices recover.
The trade-off is financial and operational. Holding Bitcoin works when the increase in the value of Bitcoin exceeds the opportunity cost of selling it to pay for capital investment or debt repayment.
If the hash price falls below the cash cost and required capital, holding is a bet that the price will recover before liquidity runs out. Marathon’s policy change means it will no longer place bets on its current margins.
The vulnerability lies in the fact that as more miners follow the same logic and monetize their production to keep their commitments current, gross flows to the exchange add supply at the very moment that ETF redemptions are already attracting demand.
How operator situations are divided
Riot Platforms posted record revenue of $180.2 million and strong profitability in the third quarter and is launching a new 112-megawatt data center shell. Although this is a capital-intensive effort, it has balance sheet options that can limit forced Bitcoin sales.
CleanSpark benchmarks marginal costs around the mid-$30,000s per Bitcoin from its fiscal first quarter disclosures and sold approximately 590 BTC in October for approximately $64.9 million in proceeds, while Treasury grew to approximately 13,033 BTC. It is active financial management that does not involve large-scale dumping.
Hut 8 reported positive net income on third-quarter revenue of approximately $83.5 million, noting mixed pressures across its cohort.
This divergence reflects power costs, financing access, and capital allocation philosophies. Operators with electricity costs below $0.04 per kilowatt-hour and sufficient equity or debt capacity can weather margin compression without relying on sales.
Companies that pay market prices for energy or have large short-term capital investments will face a different calculation. AI pivots address future selling pressure in both directions. A new long-term computing deal that combines IREN’s five-year, $9.7 billion deal with Microsoft with 20% upfront payments and a $5.8 billion Dell equipment deal.
These contracts create non-Bitcoin revenue streams and reduce dependence on coin sales. However, significant capital expenditure and working capital will also be required in the short term, so Treasury monetization remains a flexible tool for the time being.
Flow data confirms risk
The CryptoQuant dashboard shows that miner-to-exchange activity increased from mid-October to early November.
One widely cited data point shows that approximately 51,000 BTC has been transferred from miner wallets to Binance since October 9th. This does not prove an immediate sell-off, but it does create a short-term oversupply, and the ETF’s status is important to its size.
CoinShares’ latest weekly report showed net outflows from crypto ETPs at approximately $360 million, with Bitcoin products accounting for approximately $946 million of the negative net inflows, while Solana saw significant inflows.
This Bitcoin figure is equivalent to over 9,000 BTC at $104,000, which is approximately 3 days of miner issuance after the halving. A week when public miners put more emphasis on sales could meaningfully increase the same tape.
The mechanical effect is that miners sell compounds, creating redemption pressure on ETFs during the same period. ETF outflows remove primary market demand and minor exchange deposits add secondary market supply.
If both move in the same direction, liquidity could eventually become tighter, accelerating price declines. These declines then recoil, further compressing miners’ margins and causing additional sales.
break the feedback loop
The structural constraints are that miners cannot sell anything they haven’t mined, and there is a cap on daily issuance after the halving.
At the current network hash rate, the total supply for miners is approximately 450 BTC per day. Even if the entire cohort monetized 100% of its output (which it doesn’t), there is a limit to absolute flows.
Risk is concentration. The overhang widens if the largest holders decide to draw down the treasury rather than sell fresh produce.
Marathon’s 52,850 BTC, CleanSpark’s 13,033 BTC, and similar positions at Riot and Hut 8 represent several months’ worth of cumulative issuance that could theoretically be released to exchanges should liquidity needs or strategic shifts occur.
The second constraint is recovery speed. If the hash price and fee share recovers due to a rise in Bitcoin prices and a sudden rise in menpool with increased transaction fees, the economic situation for miners could change quickly.
Businesses that survived the squeeze made profits, and businesses that sold their production at rock-bottom profits booked losses. This asymmetry creates an incentive to avoid forced sales, but only if the balance sheet can absorb the temporary burn.
The stakes are whether margin compression and increased capital commitments will drive enough miners to sell aggressively, significantly increasing the drag on ETF redemptions, or whether capital-rich operators will be able to raise money through the squeeze without monetizing their treasury.
Mr. Marathon’s apparent policy shift is the clearest sign yet that even large, well-funded miners are willing to tactically sell off production when the economy tightens.
If power costs and capital expenditures continue to rise, and hash prices and fee shares remain depressed, more miners will likely be left without access to cheap electricity or external funding, especially if hash prices and fee shares remain depressed.
Sustained minor trade flows and accelerating Treasury drawdowns should be treated as additions to an outflow-driven week from ETFs.
If the tide reverses and fees recover, the pressure will quickly ease.
(Tag translation) Bitcoin
