MAC_D2024-02-06

BTC Recent Correction, Influenced by Miner Selling Pressure

Since the recent approval of a Bitcoin spot ETF, there has been a lot of news about the price correction caused by selling of the Grayscale GBTC ETF. While there are a number of factors that could be influencing the price, we can look at the recent Bitcoin holdings of major trading entities for a more direct cause. First, if we look at the BTC holdings of ETF Management Companies since the approval of the Bitcoin Spot ETF, we see an increase from 623.2K to 659.1K. In other words, there was an increase of 35.9K, so it's hard to say that Grayscale GBTC ETF selling was responsible for the Bitcoin price drop. Next, if we look at Bitcoin Miner Reserve (7-day average), we can see that they went from holding a maximum of 1.831M to 1.828M, a decrease of about 3,000 BTC. In support of this, the total Bitcoin Miner to Exchange Flow (Total) - All Miners (7-day average) shows that miners have been actively cashing out since just before the spot ETF was approved. In conclusion, we believe that the recent price correction is more directly attributable to miner selling pressure than GBTC ETF selling pressure. However, miners have historically sold and cashed out of Bitcoin rather than accumulating it. They have done this in the past to cover their operating costs in the run-up to the halving, and it is a natural process that has been repeated in the past. So while there may be some selling pressure from miners in the run-up to the halving, once they stop selling, Bitcoin will trend higher.