Bitcoin Miners Ramp Up Activity Ahead of ETF Approvals, Triggering Market Correction
Bitcoin Miners in Action Ahead of ETF Approvals
The activity of Bitcoin miners has significantly increased ahead of the approvals of exchange-traded funds (ETFs). The number of Bitcoins transferred to exchanges by miners hit a 5-month high the day before the approvals. The hash price dropped significantly as Bitcoin prices fell.
Bitcoin Correction After ETF Approvals
Bitcoin [BTC] corrected sharply two days after the spot ETFs were officially released for trading, falling by up to 7% from the values seen immediately after the approval. Over the weekend, the king coin moved in the region of $42,000, according to CoinMarketCap. Much of the downward pressure was triggered by outflows of Bitcoin from the Grayscale Bitcoin Trust (GBTC).
Did Miners See the Decline Coming?
According to on-chain analysis firm IntoTheBlock, the share of Bitcoin miners in the on-chain trading volume increased dramatically in the days leading up to the ETF approvals. In fact, the on-chain volume was the highest it has been in over four years.
Miner to Exchange Flow Spiked
To verify this data, AMBCrypto turned to another popular on-chain analysis tool, CryptoQuant. Indeed, the number of Bitcoins transferred to exchanges by miners hit a 5-month high on January 10th, one day before the approvals. Moreover, the miner-to-exchange flow has been on an upward trend since June 7th.
Was It a Wise Decision?
As we all know, miners often liquidate their holdings to cover the costs of building the mining infrastructure. These events occur more frequently when BTC rises and offers miners better returns. Note that BTC gained significant bullish momentum ahead of the approvals and rose by up to 60% in the previous three months. Therefore, miners may have seen the decline coming and decided to secure profits before it was too late.
Conclusion
Due to Bitcoin’s bull run, miner revenues have increased to levels not seen since the peak of the bull market in 2021. After a long and hard bear market, the miners couldn’t have hoped for anything better.
Sources: CoinMarketCap, IntoTheBlock, CryptoQuant, HashRate Index
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