On-chain Data Suggests No More Selling By Bitcoin Miners
April 4th, 2021
The ongoing bull run in the global cryptocurrency market has re-emphasized the hidden potentials of several digital assets including Bitcoin (BTC) and as such, miners are not looking to let any bits of the asset slip away anymore. On-chain data from Glassnode has revealed a new shift in the behavior of Bitcoin miners as the total number of the cryptocurrency that flows into exchanges dipped to a month low today at just 7.178 BTC.
Bitcoin mining is the process by which new coins are created and added to the growing number of the total cryptocurrency in circulation. Miners, that is those involved in this Bitcoin generating activity are spread all over the world and they get rewarded for their activity by receiving a defined number of the digital currency in return. These Bitcoin rewards from the Glassnode data are now being HODLed, that is, are being kept indefinitely, perhaps, until the valuation of the cryptocurrency soars to an acceptable level.
HODLing is a growing trend in the digital currency ecosystem as many investors including both the retail and institutional investors hold onto the asset amidst the dwindling valuation of fiat currencies around the world. Irrespective of the person instigating the HODLing act, the action remarkably reduces the total number of Bitcoin in circulation and this can potentially fuel limited supply in the face of increased demand, a human sparked deflation that can correspondingly impact price growth.
BTC Miners Tend to Gain More
Following the last Bitcoin halving event last May, the number of rewards paid out to miners was slashed by half and the mining difficulty increased. Correspondingly, the interest in the mining activity became low but this was well compensated for per the imbalance in the supply and demand curve.
Though the rewards are reduced, their value tends to be more boosted by the growth of the cryptocurrency by over 800% when compared to the year-ago period. With the imminent HODLing move, securing the majority of the mined Bitcoin will possibly place Bitcoin miners in the best position over time.
At the time of writing, Bitcoin is exchanging hands at $58,470.62, down 2.09% in the past 24 hours atop a 3.95% weekly gain according to CoinMarketCap.
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