Data from on-chain analytics platform CryptoQuant confirms that daily transfers of miners to exchanges have fallen by two-thirds or more.
Miners Cool Bitcoin Exchange Sales After FTX Rally
After BTC/USD lost 25% in the past week, the current concerns about the solvency of mining have increased.
Given the cost basis and the high hashrate, commentators have warned that many mining participants may not be able to make ends meet – and subsidies and fees will not be enough to cancel out expenses, particularly electricity.
However, the fundamentals of the network tell a strange story – hashrate continues to hover around all-time highs and doesn’t drop significantly, suggesting that at least some miners are maintaining network hashing power, not stopping operations en masse.
Bitcoin network basics overview (screenshot). Source: BTC.com
Meanwhile, CryptoQuant shows that on a daily basis, bitcoin miners aren’t desperately selling coins to cover shortfalls in revenue.
On November 8, the day of the FTX explosion, a total of 1,300 bitcoins flowed from mining wallets to exchanges. It was the largest one-day tally since September.
Overall, the FTX disaster period saw a relatively modest increase in selling compared to other highs this year. Miners sent 4,540 BTC to exchanges on September 2, while on June 22, at a time when BTC/USD fell to a two-year low of $17,600, the total for the day was 5,729 BTC.
Bitcoin Miner to exchange flow chart (total). Source: CryptoQuant
When zoomed out, the image becomes more accurate.
Since the last Bitcoin block subsidy halving event in May 2020, miners have drastically reduced daily exchange sales.
Around the time of the halving, the seven-day moving average of the metal exchange deposits was around 1,200 BTC per day.
The number varied widely from day to day, but in general, what counts as a November 2022 high was standard practice at the time.
Fast forward to October of this year, and on some days, miners sent as little as 100 BTC to exchanges.
Block subsidies may have been halved and fees may represent less revenue in USD terms, but even so, a clear trend is evident when it comes to interchange sales.
Bitcoin Miner to exchange flow chart (total). Source: CryptoQuant
In other words, the FTX ring produced only a short difference in miner outflows relative to its one-year moving average. This is summarized in CryptoQuant’s Mining Center Index (MPI).
Bitcoin Mining Center Index (MPI) chart. Source: CryptoQuant
Taste of things to come?
As Cointelegraph reported, bitcoin miners experienced “distress” — in terms of on-chain data — in August.
Related: Elon Musk Says BTC Will “Succeed” – 5 Things to Know in Bitcoin This Week
Since then, the Hash Ribbons Index, which is specifically designed to track miner surrenders, has been out of its red zone.
So far, nothing has worked to force miners back into mass exit. This may change yet, as the latest Hash Ribbons chart data shows that hash rate trends are fading after several months of growth.
