Ki Young Ju, the CEO of Cryptoquant, has brought to light the substantial activity of Bitcoin miners transferring a staggering 700,000 Bitcoins, valued at $35.9 billion, to over-the-counter traders shortly after the approval of a Bitcoin ETF. This shift has raised questions regarding Bitcoin’s current state and its potential trajectory.
Surge in Trading Activity and Block Size
Trading within the Bitcoin network is experiencing an uptick, characterized by a 40-50% increase in block size, attributed to the heightened network activities during Bitcoin’s recent price increase. This growth typically leads to higher fees, but the fee structure remains largely unaffected, implying that the bulk of the transactions are high-volume trades.
Bitcoin’s mining difficulty has escalated to 81.73T, with the network’s hashrate showing a remarkable year-on-year doubling from 303 EH/s to 577 EH/s. This increased difficulty and block size, alongside Bitcoin’s price rise, exerts pressure on miners, who may need to liquidate their holdings for operational sustainability and profit retention.
However, the advent of spot Bitcoin ETFs and the surge in institutional interest offer miners new strategic avenues. By leveraging their Bitcoin reserves, miners are capable of streamlining large-scale OTC deals that offer institutional players entry into the market, while they themselves reap the benefits of lucrative fees and potential price benefits.
Future Prospects for Bitcoin
Despite apprehensions regarding miner-induced selling pressure on Bitcoin’s price, the inflow into Bitcoin ETFs persists, with a notable $631 million net addition recently recorded. Market experts remain optimistic, forecasting a sustained Bitcoin rally, backed by the continuous demand for ETFs. The market capitalization hovers above the $1 trillion mark, with Bitcoin’s price at $51,592, even though it has witnessed a slight decline of 0.48% in the past 24 hours, accompanied by a 9% drop in trading volume.