Bitcoin miners sold their reserves in the run-up to the halving and the Spot Bitcoin ETFs may have diffused the selling pressure, meaning a sharp price drop has been avoided, according to Bitfinex analysts. “It appears that miners were selling ahead of time, which is good for the market in the short term,” Bitfinex wrote in its weekly market report.

Miners send bitcoin to the exchanges

Data from CryptoQuant tells us that miners sent an average of 374 bitcoin per day to the exchanges in March. That represents a 70 percent decline from February’s average of 1,300 per day; which equates to an amount of $86.4 million per day.

“We assume that miners have already sold their bitcoin or used it as collateral to upgrade their machines and infrastructure,” Bitfinex said.

For miners, the halving is and will initially remain a significant blow, which brings with it a lot of uncertainty. After all, turnovers fell from 6.25 to 3.125 bitcoin per block.

This halved bitcoin inflation from 1.7 percent to 0.85 percent on an annual basis. In theory, bitcoin is now “scarcer” than gold, at least if we follow PlanB’s Stock-to-Flow model.

Bitcoin ETFs dampen price action

According to Bitfinex, institutional demand for bitcoin from the US Spot Bitcoin ETFs also helped dampen bitcoin’s volatility (and eventual crash) after the halving.

Although Bitfinex also sees that ETF flows appear to be slowing down somewhat at the moment, there is still talk of “strong” demand for bitcoin. According to Bitfinex, the halving in combination with the ETFs can further increase the bitcoin price.

Since their launch, the ETFs have bought much more bitcoin than the miners managed to produce. From that perspective, we can say that ETFs have been a fantastic force at the start of the bitcoin bull market.


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