Bitcoin price has been hovering around $40,000 to $43,000 for weeks.
According to a report by Bitfinex, this decline is largely attributed to Bitcoin miners selling their reserves in the market.
The published report suggests that recent price declines in Bitcoin, especially following the approval of spot Bitcoin ETFs by the SEC, can be traced to sales by BTC miners. These miners used the rise in BTC as a catalyst to exit or strengthen their positions.
Miners have turned to selling in preparation for the halving event, which will take place this year and will reduce their trading profitability by reducing BTC block rewards. According to the report, selling now provides miners with capital to upgrade infrastructure and reminds us of the significant impact miners have on market liquidity and price discovery.
According to a Bitfinex report, miners' Bitcoin reserves dropped significantly shortly after spot Bitcoin ETF approvals. “Last week saw the largest outflows ever recorded from miners' wallets, and further sell-offs may be imminent,” the report said.
The halving occurs approximately every four years, or after every 210,000 blocks are mined. The last halving took place in 2020, when the block reward was reduced from 12.5 BTC to 6.25 BTC.
*This is not investment advice.
