Bitfinex, a crypto exchange, observed a decline in Bitcoin (BTC) tickers, down to $66,525, attributing it to miners selling their reserves before the halving event. This preemptive selling, combined with the introduction of spot exchange-traded funds (ETFs) in the United States, mitigated a sharp price drop during the event.
According to Bitfinex’s April 22 weekly market report, miners significantly reduced their BTC selling in March, with a daily average of 374 BTC sent to exchanges, marking a more than 70% drop from February’s average. This decline in selling activity suggests that miners may have already liquidated their BTC holdings or used them as collateral to upgrade their equipment and infrastructure.
Bitcoin experienced a 4.5% rise to $66,597 since the April 20 halving, continuing an upward trend that began on April 17. Despite the reduction in miners’ rewards to 3.125 BTC per block mined, equivalent to approximately $208,000 at current prices, Bitcoin prices have shown resilience. Historically, halvings have led to increased selling pressure from miners seeking to maximize their earnings before the reward reduction. However, rising prices and expanding mining operations typically follow, compensating for the reduced rewards.
Bitfinex suggests that the introduction of spot Bitcoin ETFs in the United States may have also contributed to dampening the halving’s impact on Bitcoin’s price. These ETFs, with significant flows reaching $192 million in Bitcoin investment product outflows last week, can influence market sentiment and pricing independently of traditional supply-demand dynamics. The combination of ETF demand and constrained supply due to the halving-induced “supply shock” could further drive price appreciation for BTC.
Despite occasional net outflows, Bitcoin ETFs have shown strong interest since their January launch. The amount of Bitcoin purchased by ETF issuers for their funds has exceeded new BTC creation since launch, tightening the market significantly. Bitfinex estimates that post-halving, as little as $30 million worth of Bitcoin could be supplied to the market daily, while daily net inflows to ETFs surpass $150 million. As a result, the total demand for ETFs has surpassed supply by over 150,000 BTC, a trend expected to continue in the coming months.
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