The outflow of miners reached a multi-year high as tens of thousands of Bitcoin (BTC), worth more than $1 billion, were sent to exchanges.
CryptoQuant data shows that the majority of Bitcoin has moved from mining company F2Pool. The move is because miners face increasing costs, Bradley Park, an analyst at the company, told CoinDesk in a message on Telegram.
Miners are entities that use large-scale computing resources to validate transactions and protect proof-of-work networks such as Bitcoin. Most revenue is usually generated through rewards given by networks that automatically mine them in the form of tokens.
Historically, miner inflows to exchanges can be a bearish signal for the price of Bitcoin, as they often precede price declines. But this is not always the caseThe connection is not final.
For example, there have been previous increases in miner outflows It sometimes led to lower pricesBut there have also been occasions, such as in August 2019, when the price of Bitcoin continued to rise despite increased outflows.
For now, analysts are viewing the current miner outflow as not being an overly bearish signal because it is occurring in the shadow of the listing of the first Bitcoin ETFs in the US – a huge event. This has been a decade in the making.