As Bitcoin‘s price hovers around $42,500, miners continue to sell their holdings, likely due to a sudden drop in the network’s hashrate, impacting profitability. Crypto analyst Ali Martinez reports a notable shift in miner behavior, with data from Cryptoquant showing about 10,600 BTC sold in the last 24 hours, amounting to $455.8 million, indicating a significant increase in miner sell-offs and dynamic market response.
A severe winter storm in the US led to the lowest hashrate levels in recent months as miners were unable to draw power from the grid. This was part of an effort to ensure essential services like hospitals had sufficient electricity and homes stayed warm during harsh conditions.
Bitcoin’s hashrate, a key network balancing tool, plummeted by 34% from 629 EH/s to 414 EH/s since last Friday, associated with electricity usage restrictions for businesses by the Texas Electric Reliability Council (ERCOT) due to adverse weather.
Despite selling pressure from Bitcoin miners, the price of the largest cryptocurrency has remained stable, possibly absorbed by strong inflows into spot Bitcoin ETFs, which saw about $900 million in the first four days of trading.
The substantial capital inflow into ETFs appears to be driving strong BTC purchases in the open market. Meanwhile, Bitcoin mining companies’ stocks are underperforming after a strong rally in 2023. Bernstein asset management analysts suggest any dip in mining stocks is a clear buying opportunity, as mining shares face two challenges: reduced investor interest as a proxy for Bitcoin’s price and the cryptocurrency’s low performance.