Bitcoin miners have been Holding Bitcoins for quite some time now. The increased bullishness in the market that materialized in the next couple of months. However, on-chain metrics depicted a change in this trend. According to the latest report by CoinMetrics, the network miners have been holding less Bitcoin of late.
Meaning, that the percentage of the supply held by Bitcoin miners has decreased over time.
The report stated,
“On-chain metrics like miners’ holdings and net transfer volumes indicate that miners’ influence on the network is slowly waning. Nonetheless, they’re still responsible for a substantial amount of activity and control a significant portion of the total bitcoin supply. Some metrics, like gross flow volumes, also hint at increasing miner activity in both dollar and bitcoin terms.”
Bitcoin Miners’ Predicament
Miners earn revenue in Bitcoins. However, their operating expenses, chiefly electricity and rent, are primarily fiat-denominated. Hence, this added pressure to sell Bitcoin for Fiat to meet these needs which is one of the most crucial factors that highlighted the decline in the miners’ holdings of the asset.
The research specifically analyzed two types of addresses connected with block rewards that found that there has been a consistent decline in miners’effect on liquidity. It’s not just the addresses that receive the block reward, witnessed a significant reduction, the ones that receive immediate transactions from them also saw a considerable decline in the number of coins held.
Miners, especially those active in the network’s early days, still control a significant amount of BTC, revealed CoinMetrics. However, it is the number of coins held by miners has generally declined throughout the network’s history. Having said that, they still remain key players in the ecosystem with access to large amounts of capital.
Around the last week of August, miners’ BTC holdings peaked. During this time, Bitcoin was hovering close to $11,000 and felt holding for a while possibly in anticipation of a higher price in the coming days which did transpire as the crypto-asset now targeted to breach $14,000.