Loading...

Bitcoin miners flocking to exchanges sending a record-breaking $128M in a week

Bitcoin

Most read

Loading Most Ready posts..

TL;DR

  • On-chain analytics platform Glassnode reported an all-time high, with Bitcoin miners sending a record $128 million to exchanges in the past week alone. 
  • Typically, miners transfer their Bitcoin profits to exchanges in preparation for cashing out and covering expenses while securing their gains.
  • The combination of near-record hash rates at 377 EH/s, peak difficulty levels, and higher energy costs has placed significant downward pressure on mining profitability.

In a recent tweet, on-chain analytics platform Glassnode highlighted a significant surge in Bitcoin miner revenue being sent to centralized cryptocurrency exchanges. The platform reported an all-time high, with Bitcoin miners sending a record $128 million to exchanges in the past week alone. This amount equates to approximately 315% of their daily revenue, indicating an extremely high level of exchange interaction.

Throughout the 2021 bull run, there were periodic spikes in miner revenue sent to exchanges as miners capitalized on profits. Additionally, there was a notable influx of capitulation in late 2022 when the market reached its cycle bottom. However, this latest spike in miner revenue far surpassed previous instances by a substantial margin.

Typically, miners transfer their Bitcoin profits to exchanges in preparation for cashing out and covering expenses while securing their gains. The recent surge in revenue sent to exchanges coincided with Bitcoin reaching its highest price of the year, briefly touching $31,185 on June 24.

Bitcoin mining profitability

Ki Young Ju, the co-founder, and CEO of CryptoQuant, expressed a similar sentiment, suggesting that the current price-to-earnings ratio was attractive for miners to sell. Despite the increased activity from miners sending Bitcoin to exchanges, the price of Bitcoin has yet to be significantly affected, as the asset remains slightly above the $30,000 threshold at the time of this writing.

However, the $31,000 price zone poses a significant resistance level for Bitcoin, as previous attempts to break it in mid-April and late June were unsuccessful. If bulls fail to make progress beyond this point, potential future losses may occur, particularly if miners initiate liquidations.

Bitcoin mining profitability, as measured by hash price, has experienced a slight uptick in the past week due to the rise in BTC prices. Currently standing at $0.076 TH/s (terahashes per second) per day, according to HashrateIndex, mining profitability has declined over 30% since July of the previous year and is down more than 80% from the peak of the 2021 bull market.

The combination of near-record hash rates at 377 EH/s, peak difficulty levels, and higher energy costs has placed significant downward pressure on mining profitability. As a result, miners may find themselves compelled to sell their hard-earned Bitcoin to cover expenses, representing a challenging situation.

The recent surge in BTC miner revenue being sent to centralized crypto exchanges has reached an all-time high. Miners, faced with increasing difficulty and hash rates along with rising energy prices, may have no choice but to liquidate their BTC holdings to cover expenses. While the current influx of Bitcoin to exchanges has yet to impact its price significantly, the $31,000 resistance level remains a crucial obstacle for the market.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions

Share link:

Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

Stay on top of crypto news, get daily updates in your inbox

Related News

Cryptopolitan
Subscribe to CryptoPolitan