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Bitcoin Miners' Increased Interaction with Crypto Exchanges
Bitcoin miners are setting a new record in terms of the amount of BTC they're transferring to centralized cryptocurrency exchanges. Glassnode, an on-chain analytics platform, highlighted an all-time peak in the revenue of Bitcoin miners sent to exchanges in a tweet on June 27th.
The analytics platform pointed out an "unusually high level of interaction" from Bitcoin miners, who had moved a whopping $128 million to exchanges over the previous week. That accounts for an impressive 315% of their daily earnings.
Noteworthy Profits and Market Lows
During the bull run of 2021, there were several noticeable upticks in miner revenue transferred to exchanges, as they cashed in on their profits. There was also a significant inflow in late 2022, marking the lowest point of that market cycle. However, the most recent surge greatly outstrips them all.
Typically, miners transfer their BTC profits to exchanges when they intend to sell, allowing them to cover their operating costs and take profits. Considering BTC hit its yearly peak at $31,185 on June 24, it seems like an opportune time for them to do so.
Impact on Bitcoin Prices
CryptoQuant's co-founder and CEO, Ki Young Ju, reinforced this perspective, suggesting that the current price-to-earnings ratio presents an "appealing price for miners to sell." Despite this, Bitcoin's price has remained fairly stable, hovering slightly above the $30,000 mark.
The $31,000 range is proving to be a significant resistance point for BTC. The market couldn't break through this level in mid-April and late June. If the bulls fail to gain new ground, we can anticipate further losses, especially if miners begin to liquidate.
Mining Profitability and Challenges Ahead
Bitcoin mining profitability, or hash price, has experienced a marginal uptick over the past week, thanks to the recent increase in BTC prices. HashrateIndex currently pegs it at $0.076 TH/s (terahashes per second) per day.
However, Bitcoin miners continue to grapple with significant challenges. Despite Bitcoin's price soaring by over 88% year-to-date, profitability has plummeted by more than 30% since July of the previous year and is down by over 80% from the apex of the 2021 bull market.
Furthermore, miners have to cope with near-record hash rates of 377 EH/s and peak difficulty levels, making their journey a steep climb. Rising hash rates, difficulty, and energy costs exert downward pressure on mining profitability. As a result, miners may be forced to sell their hard-earned Bitcoin to cover expenses, a decision that could be hard to swallow.
