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In March, bitcoin miners amassed an unprecedented level of revenue not seen in the previous 12 months, hitting a high of $2.01 billion from rewards and transfer fees. Of this total, $85.81 million was earned from transaction fees over the past month. Historic Month for Bitcoin Miners — Income Peaks at $2 Billion As we […]
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Tag: Miners
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Bitcoin Miners’ Earnings Hit Record $2 Billion in March Ahead of Halving Event
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On-chain Data Suggests Bitcoin Miners Were Behind The Selloff
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On-chain shows Bitcoin miner outflows have been elevated recently, suggesting miners were involved in the recent selloff that took the price of the crypto below $42k.
Bitcoin Miner Outflows Spiked Up Before The Crash Below $42k
As pointed out by an analyst in a CryptoQuant post, BTC miners seem to have been one of the sellers behind the price drop to $42k.
The relevant indicator here is the “miner outflow,” which measures the total amount of Bitcoin exiting wallets of all miners.
When the value of this metric spikes up, it means miners are moving a large number of coins out of their wallets right now. Such a trend can be bearish for the price of the crypto as it may be a sign of dumping from these original whales.
Related Reading | Ark CEO Cathie Wood Is As Bullish As Ever, Sees Bitcoin Hitting $1 Million By 2030
On the other hand, low values of these outflows suggest a normal or healthy amount of selling from miners. This trend, when sustained, can prove to be bullish for the BTC price.
Now, here is a chart that shows the trend in the Bitcoin miner outflows over the past several months:
Looks like the value of the indicator has shot up recently | Source: CryptoQuant
As you can see in the above graph, the Bitcoin miner outflows seem to have shown spikes in recent weeks, just before the selloff.
This would suggest that miners look to have played a role in the dump recently, sending the price of the coin diving below the $42k level.
A trend like this has been observed a few times in the past several months already, as the quant has marked in the chart.
Related Reading | Mexico’s Third Richest Man Says No To Bonds, Yes To Bitcoin
Currently, it’s unclear whether Bitcoin miners have already calmed down or if more selling is coming in the next few days.
BTC Price
After around twenty days of holding strongly above the level, Bitcoin’s price is now once again revisiting the $41k mark.
At the time of writing, the coin’s price floats around $41.1k, down 11% in the last seven days. Over the past month, the crypto has gained 4% in value.
The below chart shows the trend in the price of BTC over the last five days.
The value of BTC seems to have taken a plunge over the past twenty-four hours | Source: BTCUSD on TradingView
Due to this sharp downtrend in the price of the coin as well as the wider market, crypto futures has collected a huge amount of liquidations today. In the last 24 hours, liquidations have amounted to more than $322 million, $175 million of which occurred in the past 4 hours alone.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
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4 States Attract The Most Miners
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Dataset from Foundry shows that four states in the U.S. have the highest Bitcoin hash rate distribution. The dataset shows that many Bitcoin miners are headed to New York, Kentucky, Georgia, and Texas.
Foundry U.S. is the largest mining pool in North America and the fifth-largest globally. The hash rate is a measure of collective mining power. A mining pool enables miners to combine their hashing power with other miners all over the world.
Bitcoin Mining In The U.S.
According to the data, within the U.S., New York accounts for 19.9% of bitcoin’s hash rate, 18.7% in Kentucky, 17.3% is in Georgia, and 14% in Texas.
Source: Foundry U.S.
At the Texas Blockchain Summit in Austin on October 8, 2021, Nic Carter, co-founder of Castle Island Ventures, presented Foundry’s data. “This is the first time we’ve actually had state-level insight on where miners are unless you wanted to go cobble through all the public filings and try to figure it out that way,”
He added that “This is a much more efficient way of figuring out where mining occurs in America.”
However, Carter pointed out that the Foundry dataset does not consider all the U.S. mining hash rates as not all U.S.-based mining farms use its services. One of the largest publicly traded mining companies in America,
Riot Blockchain, with a huge presence in Texas, does not use Foundry. Therefore, the dataset does not account for its hash rate. Texas’ mining presence is understated and could possibly be higher than the 14% quoted.BTC trading at over $55K | Source: BTCUSD on TradingView.com
Many of the states with the highest Bitcoin hash rates also have high proportions of renewable energy. This fact may have started changing the narrative that bitcoin is bad for the environment.
Related Reading | $425bn Wiped Off Crypto Market As Musk Says Bitcoin Is Bad For The Environment
According to CNBC, a lot of the miners are moving to these states because they have cheap and renewable sources of power. Data from the U.S. Energy Information Administration (EIA) shows that a third of New York’s in-state generation comes from renewables sources. Kentucky, which has the second-highest hash rate, is also known for its hydroelectric and wind power. The state’s government recently passed a law that grants certain tax exemptions to crypto mining operations.
Carter also said that the migration of miners to the U.S. is positive because it means much lower carbon intensity.
Texas Leads Bitcoin Mining
Although Texas ranks fourth according to the data, experts believe it is the top mining destination in the U.S. The state houses mining giants like Riot Blockchain, and the Chinese mining service platform Bitdeer.
A report from earlier this year shows that large orders for mining ASICs are also being delivered to Texas.
Related Reading | Bitcoin Mining Moves to Texas, Bitmain Announces Partner for Massive New Facility
Crypto-friendly lawmakers, a deregulated power grid with real-time spot pricing, and access to significant renewable energy, as well as stranded or flared natural gas, are what make Texas attractive to miners, according to CNBC.
Featured image by Finance Magnates, Chart from TradingView.com
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