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It turns out that Bitcoin miners have been selling in large quantities lately, despite the fact that the price of the cryptocurrency is still stable at $42,500. One explanation might be an abrupt decline in the BTC hashrate, which would affect the profitability of miners.
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Bitcoin Miners Sell Over 10,000 BTC
According to recent research, cryptocurrency analyst Ali Martinez has discovered a significant change in the behavior of Bitcoin miners that suggests a rise in selling activity. Miners are believed to have sold around 10,600 Bitcoins (BTC) in the last day, for an estimated total estimated worth of $455.8 million, based on statistics from @cryptoquant_com. The increase in sales by Bitcoin miners indicates a responsive market, and the sizeable amount involved signifies a noteworthy development in the cryptocurrency space.
As miners restore power to the grid in the midst of severe winter storms sweeping the USA, Bitcoin's hashrate drastically drops, hitting its lowest point in months. The goal of this action is to guarantee that vital facilities, like hospitals, have enough electricity to save lives and that households can remain warm during inclement weather.
Known as one of the world's most efficient grid balancing instruments, the network hashrate of Bitcoin has dropped by 34% since last Friday. The decrease, from a peak of 629 EH/s to a low of 414 EH/s, is ascribed to ERCOT's (Electric Reliability Council of Texas) limits on business electricity usage because of the unfavorable cold weather.
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Do Bitcoin ETFs See The Pressure to Sell?
The price of Bitcoin has held stable in spite of the miners' selling pressure. The robust buying that is taking place in the midst of significant inflows into Bitcoin ETFs could be one factor. Within the first four days of the Bitcoin ETFs' launch, about $900 million has been invested in them.
The significant inflows into ETFs may be driving up open market purchases of Bitcoin. However, following a robust surge in 2023, the stocks of the Bitcoin mining companies are likewise underperforming.
However, Bernstein stated in its most recent research report, which was released on Monday, January 15, that any decline in the stocks of companies that mine bitcoin offers a chance to buy. Following the approval of spot bitcoin exchange-traded funds (ETFs), mining stocks face two obstacles. According to the paper, the first is a decline in investor interest in using them as a proxy, and the second is the effect of a declining Bitcoin price, which adds to further underperformance.