Bitcoin Miners Began Selling BTCs, Might Cause Bear Cycle
Bitcoin (BTC) miners last Tuesday transferred almost 3,000 BTC, worth approximately $28 million, straight into their exchange wallets. A few thousand others likely moved via over-the-counter (OTC) deals.
Furthermore, direct exchange transfers represent the most massive Bitcoin flow from miners to such platforms in more than a year. According to Glassnode data, they sent the bulk of the volume of 2,650 BTC to Bitfinex exchange. Typically, miners moving funds to crypto exchange en masse means an intent to sell.
The huge transfer coincided with a sharp fall in the price of BTC on Wednesday. It dropped 4% in 24 hours to around $9,300 from more than $9,700.
A massive decline in the value of Bitcoin preceded previous largescale miner transfers to exchanges. As a result, it opened a bear cycle. As of now, it is not clear if the latest transaction would have a similar effect or not.
The Glassnode data excludes over-the-counter deals, trades which Chinese mining pools often use. But still, figures from elsewhere illustrate that BTC miners might have begun selling much larger amounts of the top cryptocurrency.
Based on Cryptoquant, an on-chain monitoring service, over 9,000 Bitcoin moved on Tuesday valued at about $86 million. Most of it possibly went through OTC trades because the bulk transfers did not correspond with similar increases in exchange balances.
On December 26, 2019, miners finally moved a significant amount of BTC – an amount of 14,800 BTC. Mining pools Poolin and Haobtc accounted for the biggest share of these latest transfers. It shares up to 7,100 of BTC transfers between them.
Recently, Bitcoin is trading at $9,273, betraying optimistic crypto community expectations of an increase over $10,000 – the key level to sparking a major price rally.
Grayscale investments bought nearly half a billion dollars in BTC since the halving of the May block reward. This week, it purchased Bitcoin around three times faster than miners could produce blocks.
A tweet by crypto analyst Kevin Rooke on June 25, stated that the investment firm bought 19,879 BTC, worth $184 million, in the past week. This is for its Bitcoin Trust, bringing its overall number of coins to about 400,000.
In addition to that, Rooke said that not only is Grayscale purchasing massive amounts of the crypto, but it is also doing it at a rate of about 280% of the new Bitcoin mined.
Recently, there have been 18.415 million BTC in circulation, with the rest presumed lost. Grayscale has owned 53,588 Bitcoin all in all since the halving on May 11, equating to an average of 1,190 BTC a day.
If this goes on, it would eventually own 3.4% of the Bitcoin supply (625,069) around the world in January 2021, and 10% by the time of the next halving in 2024.
Barry Silbert, the Grayscale founder, suggested in May that the fund would likely ramp up its purchases in the second quarter. It also seems like he is a man of his word.
Aside from that, the investment firm revealed that it had $4.1 billion in assets under management as of June 25. This means that Grayscale’s value had almost doubled from $2.1 billion in May 2019.
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