Bitcoin miner reserves held steady in February, despite $40B flows to exchanges

Bitcoin Miners’ Reserves Remain Stable Despite $40 Billion in Flows to Crypto Exchanges

In February, there was a $40 billion flow from mining pools to crypto exchanges, but data from CryptoQuant shows that Bitcoin miners’ reserves remained unchanged.

As of February 28, miners held 1.828 million Bitcoin (BTC) in their wallets, just slightly different from the 1.827 million they held on February 1.

Despite this stable holding level, miners have been selling significant amounts of BTC in response to recent price fluctuations. On February 26, at least 40,000 BTC were sold as the cryptocurrency’s price broke above $52,000, according to CryptoQuant.

Cointelegraph Markets data reveals that BTC’s price has risen by 22% in the past week, fueled by inflows from exchange-traded funds (ETFs) and market expectations for the next halving.

The majority of miners’ sales leading up to the halving occurred in January, when their total reserves ranged from 1.840 million BTC at the peak to 1.827 million BTC at the end of the month.

Historically, miners tend to sell more BTC before the halving in order to maximize profits before the block reward decreases. The halving is a key aspect of Bitcoin’s deflationary mechanism, reducing the rate at which new BTC is generated and decreasing the block reward received by miners for verifying transactions.

This event happens every four years, with the next halving expected to take place around April 19, 2024, cutting block rewards from 6.25 BTC to 3.125 BTC. However, mining costs may remain the same or even increase as miners expand their operations to remain profitable.

Miners prepare for reduced rewards

Crypto miners are adapting their strategies to make the most of the upcoming April halving event. One company, CleanSpark, has announced plans for an in-house trading desk to manage and trade their large Bitcoin holdings without relying on external brokers. This approach could potentially lower trading costs for the company.

According to asset manager CoinShares, CleanSpark is well-positioned to handle the revenue decrease, along with Riot and TeraWulf. CoinShares also predicts that the average cost of production for miners post-halving will be $37,856.

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