The recent dip in Bitcoin’s value below $43,000 has been influenced by miners offloading their reserves.
This trend is largely due to the SEC’s approval of spot Bitcoin ETFs, prompting miners to either exit their positions or leverage them, a Bitfinex report says.
The report suggests that the impending halving event, which will cut miner rewards and impact profitability, is motivating this sell-off.
Bitfinex analysts have pointed out that the sales are strategic for miners, allowing them to invest in infrastructure upgrades. This move highlights the critical role miners play in influencing Bitcoin’s (BTC) market liquidity and price discovery.
Notably, there has been a significant reduction in miner reserves following the ETF approvals, marking a historic high in wallet outflows. This suggests further potential sales.
The upcoming halving event, slated for April, will halve miners’ rewards from the current 6.25 BTC to 3.125 BTC per block. Occurring approximately every four years, or after every 210,000 blocks are mined, the halving is designed to decrease the influx of new Bitcoins, thereby enhancing their scarcity over time. This mechanism is an integral part of Bitcoin’s protocol, intended to maintain its value by controlling and limiting supply.
According to NiceHash.com’s countdown, the Bitcoin halving is approximately less than 68 days away, but the timing depends on the speed and difficulty of block times.