Cryptocurrency Miners Sent Over $1 Billion To Exchanges In Two Weeks
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Bitcoin (BTC) miners have sent over $1 billion worth of bitcoin to cryptocurrency exchanges in the past two weeks, but not necessarily to sell the tokens.
Miners are entities that use great computing power to solve sophisticated encryptions and produce blocks on the Bitcoin blockchain, Each block rewards miners with 6.25 BTC who usually sell that amount to finance or expand their facilities.
In a tweet on Tuesday, analytics firm CryptoQuant said that more than 33,860 BTC have been sent to derivatives exchanges, though most had been recovered back to proprietary wallets.
Miners also reduced their reserves by 8,000 BTC in which only a small part was sent to spot trading exchanges, the company added.
"This could indicate that miners may be using their newly created coins as collateral in derivatives trading activities," CryptoQuant analysts stated. "An example of this type of trading is known as 'hedging which uses bets in the opposite direction of market consensus."
Bitcoin is up nearly 20% in the past two weeks amid favorable catalysts such as spot bitcoin ETF filings by several traditional financial firms and increased trading interest.
On-chain metrics have previously suggested that bitcoin could already be in the early stages of a bull market, which means that Bitcoin-based companies such as miners could already be taking steps to manage their reserves and holdings.
Meanwhile, in recent days there has boon $128 million in bitcoin rewards sent to cryptocurrency exchanges, an estimated. 315% of daily mining revenue, according to on-chain analytics firm Glassnode. This is the most shipped ever recorded by this metric.
Similar amounts sent to exchanges have previously caused a reversal in price increases if buyer demand is unable to absorb the sales.
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