Two Reasons Bitcoin’s Price Is Taking a Beating Bitwise

Bitcoin prices took a sharp tumble earlier this week, driving more than $300 million in crypto market liquidity in a single day. Why the sudden change?

Gayatri Choudhury, quantitative research analyst at Bitwise, said there were two key drivers of the selloff – and neither of them related to Bitcoin ETFs.

Miners are throwing.

The analyst first said on Tuesday that the activity of Bitcoin miners – a group that is “often overlooked” by market watchers. Since the fourth Bitcoin halving in April, the network's miners have been continuously selling their BTC amid very low earnings and intense competition from global competitors.

“On June 9, >3000 BTC were transferred from mining pools to Binance, which is a two-month high,” Choudhury said. Citing the CryptoQuant dashboard, the analyst pointed out that such heavy selling is associated with price reductions, such as directly after a halving in mid-April or at the end of May.

CryptoQuant published a report earlier this month detailing the sale of the aggressive miner, mostly to Marathon Digital ( MARA ) – the largest publicly traded mining company. The company unloaded 1400 BTC in June, representing 8% of its total BTC holdings.

Both Bitwise and CryptoQuant also noted that miners sold 1200 BTC on OTC tables on June 10 – their highest daily volume since March. As for formal exchanges, Choudry said more than $4.5 billion in assets moved from mining accounts to exchanges in June.

As for the motivation behind their sales, Chowdhury highlighted the miners' tight profit margins after the halving. “The energy required to maintain the grid dropped by 56 percent after the average income per terabyte was halved,” she said.

Fear of Matt Gox

Adding to the market's concerns was the announcement from Gox on Monday that it will pay customers their long-lost Bitcoin in July after a ten-year hiatus. The exchange holds more than 141,000 BTC worth more than $8.5 billion, which scares investors to wait for a sudden BTC selling pressure.

“The process may seem overwhelming now, but remember that just a year ago, Bitcoin was trading at $30,000. A year before that? 10,000 dollars,” concluded Choudhury.

The Mt. Gox sales pressure is yet to be seen, crypto investors are currently looking forward to the launch of Ethereum ETFs in the United States in the same month. Analysts at K33 Research believe the ETF will move $4 billion in its first five months on the market.