TL;DR
- Miners dump reserves ahead of halving: Bitcoin miners have been transferring large amounts of BTC to exchanges, possibly to raise capital.
- Record miner outflow on ETF launch day: On January 12, the second day of Bitcoin ETFs trading in the US, over $1 billion of BTC was moved from miner wallets to exchanges.
- Long-term investors hold on to Bitcoin: Despite the increased selling pressure from miners, on-chain data shows that long-term Bitcoin investors are not willing to sell their assets.
As we approach the Bitcoin halving event in April 2024, there is a strategic sell-off of reserves by miners. The Bitcoin Miner Reserve has dipped to its lowest since June 2021, standing at 1.826 million BTC. This notable rise in Bitcoin sales or usage by miners to raise capital is reportedly driven by the necessity to upgrade their infrastructure and equipment.
The most recent market report from Bitfinex Alpha, which analyzes on-chain data, indicates a substantial rise in Bitcoin miners’ outflow to exchanges on the second day of Bitcoin ETFs trading, January 12.
The report, referencing data from Glassnode, underscores that over $1 billion of Bitcoin was transferred to exchanges from wallets associated with miners on that day, setting a record for miner outflow not seen in six years.
On February 1, there was a notable movement of BTC from miner wallets, with 13,500 BTC transferred to exchanges. The report further mentions that approximately 10,000 BTC was returned to miner wallets on February 2. This activity could potentially be linked to certain mining firms adjusting their wallet balances.
The Impact of Approving Bitcoin ETFs in the United States
Analysts from Bitfinex indicate that a single-day net outflow of 3,500 BTC represents the peak value of this metric since May 2023. The report further states that the on-chain data, which tracks the movement of Bitcoin from miner wallets, has largely been negative following the approval of Bitcoin ETFs in the United States.
According to data from CryptoQuant, the estimated net outflows from miners amount to roughly 10,200 BTC. The reasons behind the BTC outflows from miner wallets are complex and varied. The report points to the miners’ requirement for operational liquidity, diverse reactions to market fluctuations, and modifications in response to the sanctioning of Bitcoin ETFs.
The analysts further suggest that certain miners might have sought to profit from the price increase that occurred weeks before the approval of the ETFs. After the approval of Bitcoin ETFs, miners have been noted to transfer Bitcoin from their wallets. However, on-chain data indicates that long-term Bitcoin investors are maintaining their assets and showing hesitance to sell at the prevailing market prices.
