Data shows that Bitcoin miners, who were traditionally heavy spenders, have started to change into hodlers in the last two years.
Bitcoin Miners Are Transforming Into Hodlers From Spenders
As per the latest weekly report from Glassnode, BTC miner behavior has significantly changed in the last two years, with the traditional spenders shifting towards becoming hodlers.
The relevant indicator here is the miner netflow, which measures the total amount of Bitcoin entering or exiting miner wallets.
It should be noted that this indicator is different from the normal netflow indicator, where the measurement is done from the perspective of exchanges.
When the value of the metric is negative, it means miners are taking coins out of their reserve. If such values sustain for some time, it may mean miners are currently dumping their Bitcoin. This can be bearish for the coin’s price.
On the other hand, positive values mean miners are depositing their BTC into their reserves. Such a trend can be bullish for the coin as it may imply accumulation behavior.
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Now, here is a chart that shows the trend in the value of the BTC miner netflow over the last few years:
Looks like these netflows have been largely negative recently | Source: The Glassnode Week Onchain (Week 51)
As you can see in the above graph, miners had very large negative netflows up until just a couple of years back. This means that miners were heavy spenders during those years.
However, things has changed during the years 2020 and 2021. These netflows have been for the most part positive, showing that miners have been in a state of constant accumulation.
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This trend means that miners, who were always thought to be bringing selling pressure to the market, have now started to transform into hodlers. This could be quite bullish for BTC as it increases the scarcity of the crypto.
The reason behind the shift could be newer and more advanced mining rigs that have improved profits. The report also notes that the latest expansion of Bitcoin miners into North America would also mean that they can now enjoy cheap debt and corporate equity, thus helping them sustain their operations for longer.
BTC Price
At the time of writing, Bitcoin’s price floats around $48.8k, up 3% in the last seven days. Over the past month, the crypto has dropped 17% in value.
The below chart shows the trend in the price of BTC over the last five days.
BTC's price seems to have surged today | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com