Bitcoin ETF Launch in U.S. Spurs Significant Miner BTC Outflow; Long-term Investors Hold Tight
Summary:
The introduction of Bitcoin exchange-traded funds (ETFs) in the U.S. has significantly influenced miners' BTC reserves. Over $1 billion of BTC was moved from miner wallets to exchanges within the first two trading days of Bitcoin ETFs. The Bitfinex Alpha market report detected an unprecedented outflow from miners, marking a six-year high. However, despite miners moving Bitcoin post-ETF approvals, the data suggests that long-term Bitcoin investors are holding onto their assets, showing a reluctance to sell at current market prices.
The introduction of Bitcoin exchange-traded funds (ETFs) in the United States has led to an observable impact on the BTC reserves of miners. Over $1 billion of BTC was moved from their wallets to exchanges within the first 48 hours of trading. The Bitfinex Alpha market report, which details on-chain data, suggests that there was a substantial growth in Bitcoin miners' transfers to exchanges on the second day of Bitcoin ETF trading on January 12.
Based on Glassnode data, the report indicates that more than $1 billion of Bitcoin (BTC) was shifted from miner-related wallets to exchanges on the same day - this represents the highest movement of funds from miners in six years. February 1 also witnessed a large amount of BTC, 13,500 to be exact, exiting miner wallets to exchanges. However, around 10,000 BTC found its way back to miner wallets on February 2, indicating that particular mining firms might be realigning their wallets.
Bitfinex analysts infer from the data that a single day net outflow of 3,500 BTC is the largest recorded since May 2023. The report further illustrates, citing CryptoQuant data, that since the approval of Bitcoin ETFs in the US, there has been a consistent negative trend in the flow of Bitcoin from miner wallets. Estimated net outflows from miners are projected to be around 10,200 BTC.
Bitcoin miners' reserves have dwindled to 1.826 million BTC, the lowest since June 2021. These BTC outflows are driven by a plethora of factors including the requirement for operational liquidity amongst miners and differential reactions to market circumstances and adjustments in light of the approval of Bitcoin ETFs. Analysts also speculate that specific miners might have sought to leverage the price surge weeks prior to the authorization of the ETFs.
Meanwhile, even as on-chain data via the Bitcoin ETFs approval showed miners transferring Bitcoin from wallets, it also hints at long-term Bitcoin investors retaining their assets and showing reluctance to sell at current market prices. Analysts studying the supply last active metric identified a decrease in supply last active within the one-year and two-year brackets. This particular pattern of activity is associated directly with the Grayscale Bitcoin Trust with inactive BTC holdings being either sold or converted into other Bitcoin ETFs.
The report emphasizes that the transfer of older Bitcoin supply is an important indicator of market behavior. It mirrors changing investor sentiments and strategies in response to Bitcoin ETFs as well as reassessments in view of the current market conditions. However, a significant majority of the Bitcoin supply continues to be held tightly, indicating that long-term investors still believe in the future appreciation of Bitcoin.
Published At
2/6/2024 12:51:00 PM
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