In an unprecedented move, Bitcoin miners have directed a record-breaking amount of revenue towards centralized cryptocurrency exchanges. This comes amid a period of high exchange interaction characterized by the transfer of $128 million to exchanges over the past week, reported Glassnode, an on-chain analytics platform. Remarkably, this represents a hefty 315% of the miners’ daily revenue.
This major uptick comes off the back of several significant inflows during the 2021 bull run, where miners took the opportunity to cash in on their profits. Another significant inflow was observed towards the end of 2022, during a market low point. This most recent surge, however, outpaces these previous spikes by a substantial margin.
Typically, miners transfer their Bitcoin profits to exchanges when they anticipate needing to liquidate some assets, usually to cover costs or take profits. The timing suggests this could be the case now, as Bitcoin recently reached its highest price point for the year, touching $31,185 on June 24. This was an attractive selling point for miners, according to Ki Young Ju, CryptoQuant’s co-founder and CEO.
Yet, despite the record inflow, Bitcoin prices remain relatively unaffected, lingering slightly above the $30,000 threshold. However, the current $31,000 price zone represents a significant resistance level that Bitcoin failed to breach in mid-April and again in late June. The bullish market could face serious losses if the resistance isn’t overcome and miners start liquidating assets.
Over the past week, mining profitability, also known as hash price, has seen a minor increase due to the uptick in Bitcoin prices, currently at $0.076 TH/s per day according to HashrateIndex. However, year-to-date Bitcoin value increases of over 88% contrast starkly with the decline in mining profitability, down over 30% since July last year, and over 80% from the 2021 bull market peak.
Miners are grappling with not only falling profitability but also rising hash rates (almost record highs of 377 EH/s) and peak difficulty levels. Higher energy prices, combined with increasing hash rates and difficulty, are reducing mining profitability. Selling their Bitcoin may become an unpleasant but necessary step for miners to cover their expenses, a move which could significantly impact the Bitcoin market.