Bitcoin ($BTC) Miner Outflows Hit 77-Month High as Hashrate Keeps Growing

Bitcoin miner outflows have recently risen to hit a 77-month high at a time in which the price of the flagship cryptocurrency has been recovering and is now trading at around $46,000, suggesting miners believe its price may be facing a local top.

According to data shared by cryptocurrency analytics firm CryptoQuant, Bitcoin miner outflows, don’t directly monitor miner address transactions to cryptocurrency exchanges, but monitor outflows from $BTC mining pool wallets.

While this could mean Bitcoin miners are moving their funds to other addresses in a bid to safeguard them, CryptoQuant notes that growing outflows are an indicator of sentiment, as more outflows mean more miner rewards are exposed to being sold on the market – a bearish signal.

These outflows come at a time in which the U.S. Securities and Exchange Commission approved 11 spot Bitcoin exchange-traded funds (ETFs), including some from major asset managers including BlackRock and Fidelity.

Bitcoin’s price rose more than 170% over the past year as investors expected the launch of these funds, which according to proponents could see institutional and retail investors increase their bets on $BTC, as they allow them to gain exposure to the cryptocurrency without managing a private key.

Bitcoin’s hashrate – the network’s mining power – has also been growing, and recently reached a new peak above 550 exahashes per second (EH/s), after hitting a 540 EH/s high late last month. A growing hashrate means that there’s more competition aming miners for coinbase and fee rewards, which squeezes miners’ profits.

This growing competition may mean some miners have to sell their $BTC holdings to cover their expenses and keep their operations growing, and ultimately may lead to the capitulation of some miners, while other operations grow.

Featured image via Unsplash.