Bitcoin (BTC) miners are sending record amounts of BTC to centralized crypto exchanges.
In a June 27 tweet, on-chain analytics platform Glassnode reported an all-time high in bitcoin miner earnings sent to exchanges.
Percentage of miner earnings sent to exchanges. Source: Glassnode.
It noted that there was currently “extremely high exchange interaction” from Bitcoin miners, who sent a record $128 million to exchanges over the past week. That equates to 315% of their daily sales, according to the analytics platform.
During the 2021 bull market, there were multiple spikes in miners’ earnings, which were sent to exchanges as they took profits. Late 2022 also saw a capitulation inflow as markets hit their cycle bottom.
However, this recent surge has clearly eclipsed them all.
When miners send BTC profits to exchanges, they usually do so in preparation for a withdrawal to cover their expenses and take profits.
The past week would be a good time to do so, as BTC hit its highest price of the year so far on June 24, hitting $31,185.
CryptoQuant co-founder and CEO Ki Young Ju echoed the sentiment at the time, stating that the current price-to-earnings multiple is “an attractive price for miners to sell.”
However, bitcoin prices are yet to be affected as the asset is still slightly above the $30,000 threshold at the time of publication.
Still, the current $31,000 price zone represents a key resistance point for BTC, which markets failed to break through in mid-April and again in late June. If the bulls fail to break new ground, expect future losses, especially as miners begin to liquidate.
Bitcoin mining or hash price profitability has increased slightly in the last week due to the surge in BTC prices. According to HashrateIndex, it is currently 0.076 TH/s (terahashes per second) per day.
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Although the Bitcoin price is up more than 88% year-to-date, miners still face some major challenges. Profitability has plummeted more than 30% since July of last year and is down over 80% since the peak of the 2021 bull market.
Combined with near-record hash rates of 377 EH/s and highest difficulty levels, Bitcoin miners still face an uphill battle.
Increasing hash rates and difficulty, coupled with higher energy prices, have resulted in downward pressure on mining profitability. This means that selling their hard-earned bitcoin can prove to be an inconvenient necessity to defray expenses.
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