Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesCopyBotsEarn
Bitcoin Sees Longest Miner Consolidation Period Since Trading Near $16K

Bitcoin Sees Longest Miner Consolidation Period Since Trading Near $16K

CryptopotatoCryptopotato2024/05/07 13:13
By:Chayanika DekaMore posts by this author

Bitcoin miners are strategically accumulating to sell at better prices in the future.

While the effects of the fourth halving slowly set in, Bitcoin miners appear to be selling less and holding onto more BTC after the recent block reward reduction.

In fact, Bitcoin is currently seeing the longest-ever miner consolidation and accumulation period since it hit $16K.

BTC Miner Accumulation Continues

According to the latest analysis by CryptoQuant, the Miner Position Index (MPI) and Puell Multiple, which track miner selling activity and profitability, respectively, are indicating a significant reduction in miner sell pressure post-halving, with 14 consecutive days of consolidation and accumulation.

Simultaneously, miners are experiencing their lowest revenue levels in a year. This trend suggests that they are holding onto their BTC in anticipation of higher prices before selling.

As spot Bitcoin ETF flows increase and the likelihood of a rate cut in Q4 rises, miners are likely accumulating in preparation for a profitable sell-off in the coming months.

The halving slashed mining rewards from 6.25 BTC to 3.125 BTC. Initially, excitement around the event and the launch of Bitcoin Runes kept miners’ earnings up, but this changed in May as revenue dropped significantly.

Data compiled from Blockchain.com suggest that the total revenue from block rewards and fees hit a new low of $26.3 million on May 1. Before the halving, miners made around $6 million per day on average.

Prominent Bitcoin miner Hut 8 reported a 35% drop in proprietary production for April. Other public mining companies such as Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf also witnessed production declines of between 6% and 12% for the same period.

Bitcoin Network Sees Surge in Usage

Meanwhile, CryptoQuant CEO Ki Young Ju highlighted a significant shift in miners’ income streams due to the development of applications on the Bitcoin network. As per the exec’s findings, transaction fees now contribute over 7% to miners’ total revenue, a stark increase from just 1% two years ago.

Building apps on #Bitcoin has significantly changed miners’ income streams.

Transaction fees now account for over 7% of their total revenue, up from 1% two years ago.

This trend has persisted for the last four weeks and could potentially strengthen the network’s fundamentals. pic.twitter.com/YVbdmLXB5c

— Ki Young Ju (@ki_young_ju) May 7, 2024

This change has been consistent over the past four weeks and therefore could potentially reinforce the network’s fundamentals. Additionally, on May 6, a total of 458,000 OP RETURN codes were used, suggesting a growing utilization of the Bitcoin network for purposes beyond basic transactions, essentially indicating a broader adoption.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

US watchdog lodges complaint with DOJ, OGE over President Trump's official memecoin

Public Citizen has complained to the DOJ and OGE, calling for an investigation into President Trump over alleged federal violations related to his official memecoin launch.Federal law strictly regulates payments to government officials and bars gift solicitation, the watchdog said.

The Block2025/02/06 15:00

Ondo Finance expands onchain offerings with new Layer 1 blockchain

Franklin Templeton, Wellington Management and WisdomTree, among others, will advise on the design of Ondo Chain.Ondo Finance on Tuesday launched Ondo Global Markets, designed to open onchain exposure to stocks, bonds and ETFs.

The Block2025/02/06 15:00

BNB Chain's test memecoin surged to a $52 million market cap minutes after CZ posted about it

A BNB Chain test memecoin (TST) soared to a $52 million market cap within minutes of Changpeng “CZ” Zhao’s X post mentioning “happy trading!”Zhao clarified that TST is not an official BNB Chain token and that no one from Binance holds it.

The Block2025/02/06 15:00