Bitcoin Miner Outflows Surpass $1 Billion Since ETF Launch
06 Feb, 2024 ● Crypto News
The introduction of Bitcoin exchange-traded funds (ETFs) in the United States has had a direct impact on the reserves of BTC held by miners, with over $1 billion worth of BTC shifting from miner wallets to exchanges within the first 48 hours of trading.
According to the latest Bitfinex Alpha market report, which analyzes on-chain data, the second day of Bitcoin ETF trading on January 12th witnessed a notable uptick in BTC outflow from miner-associated wallets to exchanges.
Drawing from Glassnode data, the report underscores that over $1 billion worth of Bitcoin was transferred from miner wallets to exchanges on the same day, marking a six-year peak in miner outflows.
On February 1st, another substantial amount of BTC left miner wallets, totaling 13,500 BTC sent to exchanges.
The report also mentions approximately 10,000 BTC returning to miner wallets on February 2nd, suggesting potential wallet rebalancing actions by specific mining companies.
Bitfinex analysts note that a net outflow of 3,500 BTC in a single day represents the highest value of this metric observed since May 2023.
Additionally, the report highlights that on-chain data depicting BTC flow from miner wallets has predominantly shown negative trends since the approval of Bitcoin ETFs in the United States.
CryptoQuant data estimates the net outflows from miners to be around 10,200 BTC.
Various factors contribute to BTC outflows from miner wallets, including the need for operational liquidity, responses to market conditions, and adjustments following the approval of Bitcoin ETFs.
The analysts also suggest that some miners may have sought to capitalize on the price surge weeks before the ETF approvals.
“This substantial transfer of BTC from miners to exchanges reflects the miners’ response to market conditions and potentially their need to liquidate holdings for operational expenses or risk management.”
While miners have been seen moving Bitcoin from wallets post-ETF approvals, on-chain data indicates that long-term Bitcoin investors are holding onto assets and are hesitant to sell at current market prices.
Referring to the supply last active metric, the analysts highlight a decrease in supply last active within one-year and two-year time frames.
This activity is closely linked with the Grayscale Bitcoin Trust, with dormant BTC holdings either sold or exchanged for other Bitcoin ETFs.
“The result being that a noteworthy volume of BTC, which has been dormant for an extended period, has begun to circulate in recent weeks.”
The report emphasizes that the movement of older Bitcoin supply serves as a significant indicator of market behavior, reflecting shifts in sentiment and strategies among investors responding to Bitcoin ETFs or reassessing their positions in light of current market conditions.
Despite these movements, the analysts assert that a significant majority of the Bitcoin supply remains firmly held. The trend of long-term investors retaining their holdings underscores a continued belief in the future appreciation of Bitcoin.
Sources:
https://cointelegraph.com/news/bitcoin-etf-miner-reserve-btc-outflows
