Bitcoin

On-chain metrics show that miners’ influence on Bitcoin price is decreasing

A new report from on-chain analytics provider CoinMetrics suggests this The considerable influence of miners on the Bitcoin network is slowly waning.

The research analyzed the miners ‘and pools’ addresses and expenses to see if their impact on the entire network had changed over time.. Because miners receive freshly issued bitcoin instead of buying it, they are natural net sellers of the asset.

Measuring the net flows from two types of addresses associated with block rewards showed this The miners’ liquidity impact has gradually diminished::

“On-chain metrics such as miners ‘stocks and net transfer volumes show that miners’ influence on the network is slowly decreasing.”

On-chain metrics show that miners’ influence on Bitcoin price is decreasing
On-chain metrics show that miners’ influence on Bitcoin price is decreasing

Payments for operating costs like electricity and rent are made in fiat, which increases the pressure to sell BTC for fiat. Research found that the percentage of miners supply has generally declined over time.

Both the addresses receiving the block reward and those receiving instant transactions from them saw a Reducing the number of coins they hold.

The gradual reduction in the supply of miners and pools is even more evident in the context of the overall supply. The report confirmed this Miners and swimming pools still control a “substantial part” of the total supply.

Miners, especially those who were active in the network’s early days, control a significant amount of BTC.

But the number of coins held by miners has generally decreased over the history of the network.

According to the graphic, the percentage of the total supply of pool addresses and miners has fallen from around 25% in 2015 to around 18% today. Declining inventory levels mean miners can download less bitcoin in the markets, reducing their impact on prices.

Net flows were volatile in the early days of the network as the quantity sold and prices varied widely. But still, Volatility has gradually decreased over time, likely due to halving events and declining block rewards.

“These flows have also seen a gradual decrease in volatility, indicating a gradual decrease in the miners’ impact on liquidity.”

Recently, other parameters in the chain have also decreased, such as the hash rate, which has decreased due to the change of season in China, where most of the mining takes place. The most recent difficulty adjustment has also been known as the largest down adjustment during the ASIC era. according to CoinMetrics.

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