According to a market report from Bitfinex, Bitcoin mining companies, with BTC priced at $29,968, are implementing derisking strategies by selling BTC to exchanges. The report highlights a notable increase in miners selling significant amounts of BTC to exchanges, which has consequently boosted the value of shares in Bitcoin mining companies. This trend is attributed to growing institutional interest in BTC during the year 2023.
The report specifically mentions that Poolin has been responsible for the largest amount of BTC sold to the market in recent weeks. Bitfinex analysts also point out that the Bitcoin mining difficulty has reached an all-time high, which they consider as a positive indicator of the network’s strength and miner confidence.
The report speculates that miners are hedging their positions on derivatives exchanges, citing a substantial 70,000 BTC in 30-day cumulative volume transferred in the first week of July 2023. While miners have historically used derivatives to hedge large spot positions on exchanges, the current high volumes are deemed atypical.
The analysts mention data from Glassnode, which indicates that Poolin has been significantly involved in this activity, offloading BTC to Binance.
Bitfinex’s report acknowledges several potential reasons behind this recent mining behavior, including hedging activities in the derivatives market, fulfilling over-the-counter orders, or transferring funds through exchanges for other purposes.
The increasing mining difficulty is interpreted as a sign of new mining power being added to the Bitcoin network, indicating improved network health and increased confidence in mining profitability, driven by rising BTC prices or enhanced hardware capabilities.
Furthermore, the report suggests that on-chain Bitcoin movements reflect a shift in supply from long-term holders to short-term holders. This behavior is commonly observed during bullish market conditions, with new traders seeking quick profits while long-term holders capitalize on higher prices.
Inquiring into the reasons for the surge in Bitcoin outflows from miners over the past month, Cointelegraph has reached out to several mining companies and pools. Previously reported, miners sent over $128 million in revenue to exchanges at the end of June 2023.