As a long-term crypto investor with a background in mining operations, I find the recent trend of miner accumulation and consolidation in Bitcoin intriguing. The fourth halving has brought about significant changes in the mining landscape, with miners selling less and holding onto more BTC due to reduced rewards and increased competition.
As a Bitcoin analyst, I’ve observed that following the fourth halving, the rate at which miners are offloading their mined Bitcoin has decreased noticeably. Instead of selling more, they seem to be hoarding larger quantities in their possession.
Right now, Bitcoin is undergoing its longest-running phase of miner concentration and stockpiling since reaching the $16,000 mark.
BTC Miner Accumulation Continues
Based on the most recent findings from my analysis as a CryptoQuant analyst, the Miner Position Index (MPI) and Puell Multiple have shown that miner selling activity and profitability have significantly decreased following the halving event. This trend has been consistent for the past 14 days, with no signs of major sell-offs and instead an accumulation phase taking place.
As a crypto investor, I’ve noticed that miners are currently earning the least revenue they have in the past year. This observation implies that they might be hoarding their Bitcoins, waiting for more favorable price conditions before making any sales.
With the surge in Bitcoin ETF investments and growing expectation of a fourth quarter interest rate reduction, miners are probably stockpiling in anticipation of lucrative sales in the upcoming months.
As a researcher studying the Bitcoin mining landscape, I’ve observed that the reward for mining a block was halved from 6.25 BTC to 3.125 BTC in May. At first, this event brought excitement and the introduction of Bitcoin Runes kept miner earnings relatively stable. However, revenue began to plummet significantly afterwards.
According to data from Blockchain.com, the combined income from block rewards and transaction fees reached a record low of $26.3 million on May 1, 2023. Previously, miners were earning approximately $6 million daily before the halving event took place.
Hut 8, a well-known Bitcoin miner, announced a significant decrease of 35% in its proprietary Bitcoin production for the month of April. Similarly, other publicly traded mining companies including Bitfarms, Cipher, CleanSpark, Core Scientific, Riot, and Terawulf reported production drops ranging from 6% to 12% during the same timeframe.
Bitcoin Network Sees Surge in Usage
According to CryptoQuant CEO Ki Young Ju’s analysis, there has been a noticeable change in how miners generate income. Two years ago, transaction fees made up only 1% of their overall earnings. However, with the emergence of new applications on the Bitcoin network, transaction fees now account for over 7% of miners’ total revenue.
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.
As a researcher observing this trend, I’ve noticed that it has been consistent for the past four weeks. It could potentially fortify the network’s foundations.
— Ki Young Ju (@ki_young_ju) May 7, 2024
Over the past month, this change has shown stability and may strengthen the foundations of the Bitcoin network. Furthermore, on May 6th, approximately 458,000 OP RETURN codes were employed, implying an increasing usage of the Bitcoin network for functions beyond typical transactions, suggesting a broader acceptance.
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2024-05-07 15:22