Bitcoin Miner Outflows Hit Six-Year Highs Ahead of Halving, Sparking Mixed Signals

CryptoQuant data shows that miners are moving bitcoin to exchanges, likely because of a need to build more liquidity in anticipation of higher capital expenditures.

AccessTimeIconJan 12, 2024 at 11:08 a.m. UTC
Updated Mar 8, 2024 at 7:54 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Miner outflow has hit a multi-year high as tens of thousands of bitcoin (BTC), worth over $1 billion, have been sent to exchanges.

(CryptoQuant)
(CryptoQuant)
  • Will Bitcoin Momentum Continue After the Halving?
    10:09
    Will Bitcoin Momentum Continue After the Halving?
  • Will Bitcoin Momentum Continue After the Halving?
    10:09
    Will Bitcoin Momentum Continue After the Halving?
  • Bitcoin Will 'Definitely' Reach $100K in Current Cycle, Bitget Exec Says
    00:36
    Bitcoin Will 'Definitely' Reach $100K in Current Cycle, Bitget Exec Says
  • How Spot BTC ETFs Could Influence Bitcoin's Response to the Halving
    01:04
    How Spot BTC ETFs Could Influence Bitcoin's Response to the Halving
  • CryptoQuant data shows that the majority of the bitcoin has moved from mining company F2Pool. Bradley Park, an analyst at the company, told CoinDesk in a Telegram message that the move is due to miners facing increased costs.

    Park pointed to the increased costs of F2Pool moving to Kazakhstan and the need to upgrade miners to Bitmain’s latest Antminer T21 before the halving – which decreases the rewards for mining and thus the per-machine yield – as the reason for the outflow.

    F2Pool’s hashrate has already begun to increase, suggesting that it has begun upgrading its capacity. Hashrate is the measure of the computational power of a blockchain, group, or individual.

    Miners are entities that utilize extensive computing resources to validate transactions and safeguard proof-of-work networks such as bitcoin. Most revenue is typically generated by rewards automatically awarded by the networks they mine in the form of tokens.

    Historically, miner outflows to exchanges can be a bearish signal for bitcoin's price, as they often precede price drops, but this isn't always the case, and the correlation is not definitive.

    (CryptoQuant)
    (CryptoQuant)

    For instance, past increases in miner outflows have sometimes led to price drops, but there have also been occasions, like in August 2019, when bitcoin's price continued to rise despite increased outflows.

    Right now, analysts are leading towards the current miner outflow as not being an overly bearish signal as it’s occurring in the shadow of the listing of the first U.S. bitcoin ETFs – a monumental event that's been a decade in the making.

    Edited by Shaurya Malwa.


    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.