Bitcoin ETFs 4-8X More BTC Price Impact Than Miners – Research
Bitcoin (BTC) miners have little influence on BTC price action when they sell, new research has confirmed.
In its latest edition of its weekly newsletter, The Week Onchain, analytics firm Glassnode debunks the myths that Bitcoin miners are driving the bear market.
Bitcoin Exchanges, ETFs Dwarf Miners' “Market Impact”
Bitcoin miners may be seeing tough times after the recent block grant halving slashed block rewards by 50%, but that should be the least of bulls' worries.
Analyzing the largest investor groups, Glassnode shows that it is truly centralized exchanges and US-based Bitcoin exchange-traded funds (ETFs) that hold the most control over BTC price movements.
As of July 2024, exchanges still hold over 3 million BTC, while ETFs have 887,000 BTC in assets under management. In contrast, the known mining wallets hold around 705,000 BTC.
“Historically, large coin holdings have been held by market agnostic entities such as the Mt.Gox Trustee, who were tasked with holding the coins recovered after the collapse and bankruptcy of the Mt.Gox exchange. Similarly, significant volumes of coins have been seized by government law enforcement.”
“Recently, institutional level hedgers, and ETFs have entered the picture. A group of 11 new US spot ETFs have now accumulated a combined +887K BTC, making their combined balances the second largest bitcoin pool we track.
On a week-to-week basis, Glassnode shows miners moving up and down around 500 BTC. This is part of the balance changes of both exchanges and ETFs.
“Miners have historically been the main source of sell-side pressure, but with each halving event the relevance of supply decreases,” The Week Onchain continued.
Exchange and ETF balances can change by around 4,000 BTC per week, something Glassnode says “points to flows in these entities that have around 4x to 8x more market impact than miners.”
The recent sale by the German government has given the miners another challenge. Although “spectacular”, the onchain data indicates that the markets value the German multi-billion dollar distribution first.
“The Bitcoin market has taken a significant 48k BTC in the last month after the German government fully distributed their balance sheet,” reports Glassnode.
“This complete exhaustion of sell-side pressure by the German government has given the market enough relief, but the first glimmers of renewed demand-side pressure have led to positive price action.”
Bitcoin miners see less reason to sell.
Meanwhile, the future may already be looking for miners.
RELATED: Bitcoin price hits bull market trend with 30% gain
Cointelegraph reports that the hash rate attempted to rise to new highs last week, and Bitcoin's Hash Ribbon indicator suggests that conditions are slowly improving.
An indicator that measures the 60-day and 30-day rolling hashrate, however, shows that the “capital” level of mining is ongoing.
“The fast moving average is rising again and will soon overtake the slow one. This means that the total amount of hashes corresponding to its price has started to grow again,” onchain data platform Bitcoin is Data told its followers on July 15.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
