- On-chain data analyzed by Bitfinex shows that Bitcoin (BTC) miners have entered an accumulation phase for the upcoming halving event planned for April 2024.
- The upcoming event will be the fourth since the creation of BTC and is expected to reduce the network’s rewards from 6.25 BTC per block to 3.125 BTC.
- Bitcoin mining companies have increased their liquidity positions and reduced their tendency to sell more BTC. This is due to the increase in stock prices following news surrounding Bitcoin exchange-traded funds (ETFs).
According to recent data, Bitcoin miners have experienced minor outflows but are now in the accumulation phase for the halving event in 2024.
Bitcoin Miners Prepare for 2024
On-chain data analyzed by Bitfinex shows that Bitcoin (BTC) miners have entered an accumulation phase for the upcoming halving event planned for April 2024. According to the Bitfinex Alpha report, the miner reserve metric has shown a significant accumulation trend since May 27, 2023, and has increased since the recent drop in Bitcoin’s price level of $30,000.
The Bitcoin halving, which occurs every four years or after 210,000 blocks, is a mechanism that halves the rewards for miners in the network. This includes reducing the rate of new BTC creation and increasing the value of the asset. The upcoming event will be the fourth since the creation of BTC and is expected to reduce the network’s rewards from 6.25 BTC per block to 3.125 BTC.
In response to the upcoming event, miners transitioned to an accumulation trend after the selling frenzy that began in August 2022. Bitfinex recorded limited on-chain BTC outflows in July, which suddenly increased towards the end. The exchange reported that this movement was “likely a precaution against potential resistance levels with buyers.”
Bitcoin mining companies have increased their liquidity positions and reduced their tendency to sell more BTC. This is due to the increase in stock prices following news surrounding Bitcoin exchange-traded funds (ETFs). It can be said that miners can expand their mining equipment and cope with potential price drops thanks to their strong financial reserves.
Institutional Crypto Investors Approach with Caution
While Bitcoin miners increase their holdings, institutional crypto investors are approaching their investments cautiously. According to Bitfinex, this is due to the broader market being “inactive” and trading volume decreasing by 62% since the beginning of the year. Bitfinex explained it as follows;
“Volatility indicators suggest that we are heading towards quieter times in general. Bitcoin’s historical metrics seem to be settling, indicating a balanced market as traders indicate.”
Interestingly, Bitcoin funds are still experiencing significant outflows, but institutional investors have stopped shorting BTC through investment products for the first time in 14 weeks. The movement of funds is consistent with investors realizing their profits.
“The overall behavior of institutional investors reflects a cautious investment strategy in crypto assets and is increasing their profits after a stagnant summer trading season,” added Bitfinex.
