Bitcoin (BTC) miners are having less influence on BTC price movements during sell-offs, according to new research.
Analytics firm Glassnode has dispelled the myth that Bitcoin miners are driving the market lower in the latest issue of its weekly newsletter, “The Week Onchain.”
Bitcoin Exchanges, ETFs, Miners Overwhelm the “Market Influence”
Bitcoin miners may have had a tough time after the recent block subsidy halving cut block rewards by 50%, but that may not be the biggest concern for investors.
Glassnode’s analysis of the largest investment institutions found that centralized exchanges and US spot Bitcoin exchange-traded funds (ETFs) actually have the greatest influence on BTC price movements.
The exchange still holds over 3 million BTC as of July 2024, while the ETF has 887,000 BTC under management, while known miner wallets hold around 705,000 BTC.
“Historically, large coin holdings have been held by non-market entities, such as the Mt. Gox custodian, which was tasked with storing coins recovered after the Mt. Gox exchange collapsed and went bust. Similarly, significant amounts of coins have been seized by government law enforcement agencies and periodically sold off in tranches,” Glassnode explained.
“Recently, institutional grade custodians and ETFs have emerged. 11 new US spot ETFs now have a combined +887K BTC, making their combined balance the second largest Bitcoin pool we monitor.”
On a weekly basis, Glassnode shows that miner balances fluctuate by around 500 BTC, which is a fraction of the balance changes on exchanges and ETFs.
“Miners have historically been the primary source of sell-side pressure, but their supply relevance diminishes with each halving event,” continued “The Week Onchain.”
Exchange and ETF balances can fluctuate by around 4,000 BTC per week, and Glassnode says that “the flows through these institutions are likely to have around 4-8x more market impact than miners.”
The recent German government selloff has given miners another source of competition, with “tremendous” on-chain data suggesting the market has already priced in billions of dollars worth of German supply.
Glassnode concluded, “The Bitcoin market absorbed 48,000 BTC in the past month as the German government fully distributed its balance sheet.”
“With the selling pressure from the German government completely dissipated, there was ample relief in the market, and early signs of a demand-side resumption were stimulating positive price action.”
Bitcoin Miners Have Fewer Reasons to Sell
Meanwhile, the future for miners may already be bright.
Related: Bitcoin Price Reaches Bullish Trendline That Last Led to 30% Rise
As Cointelegraph reported, the hash rate soared to an all-time high last week, and Bitcoin’s hash ribbon indicator suggests that the profitability situation is slowly improving.
Metrics measuring the 60-day and 30-day rolling hashrate nonetheless show that the miner’s “surrender” phase is underway.
“The fast moving average is growing again and will soon surpass the slow moving average. This means that the aggregate hash rate, which is correlated with price, is starting to grow again,” on-chain data platform Bitcoin is Data told X’s followers on July 15.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.