Bitcoin‘s price has shown resilience after the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs, a move that usually boosts investor confidence. However, the liquidation of Bitcoin assets by miners has sparked fear in the market, as it could signal potential selling pressure.
CryptoQuant reported that miner outflows have surpassed $1 billion, reaching a multi-year high. This activity primarily involves the transfer of Bitcoin from mining company F2Pool to cryptocurrency exchanges, indicating a possible need to cover increased operational costs.
Bradley Park of F2Pool suggested that the liquidations are due to rising costs and the necessity to upgrade to the latest Antminer T21 machines before the fourth Bitcoin block reward halving, which will reduce rewards and efficiency per machine. Meanwhile, F2Pool’s hashrate has begun to increase, suggesting an expansion in their mining capacity.
Miners use extensive computational resources to validate transactions and secure Proof of Work (PoW) networks like Bitcoin. Their primary income usually comes from network rewards paid in the native cryptocurrency.
Historically, increased miner outflows to exchanges have often preceded price drops in Bitcoin. However, not all outflows lead to price declines, and there are instances where Bitcoin’s price has risen despite increased outflows. Analysts currently believe that the recent miner outflows, coinciding with the listing of the first U.S. spot Bitcoin ETFs, do not necessarily indicate an imminent price crash.