How badly Bitcoin miners hodling 20b USD can affect the market

Glassnode’s on-chain data shows that Bitcoin miners hold a record 1.82 million BTC, equivalent to about $ 20 billion. The data could be the main catalyst for BTC or could be considered a negative factor in the short term.

How can Bitcoin miners affect the market?

CryptoCompare, a crypto market data provider quoting Glassnode, said hodling from Bitcoin mining had reached a two-year high. CryptoCompare analysts said:

“Bitcoin miners are now holding more bitcoins than at any other point in the last two years, as the flagship cryptocurrency continues to trade above $11,000.”

Data can be analyzed in two ways. It can be a positive catalyst because it shows that miners are saving the BTC they are mining. However, it may also mean that miners currently have large amounts of Bitcoins, which could become a source of selling pressure.

In May, market analyst Willy Woo said there are two insurmountable sources of selling pressure in the Bitcoin market.

“There’s only two unmatched sell pressures on the market. (1) Miners who dilute the supply and sell onto the market, this is the hidden tax via monetary inflation. And (2) the exchanges who tax the traders and sell onto the market.”

If miners hold more Bitcoin than usual and start selling over time, it could put selling pressure on the entire crypto market. Miners selling BTC are different from traders who sell or buy BTC. Woo noted:

“This is very different from traders buying or selling. When we say traders are ‘buying’ or ‘selling’ this is a myth. Every trade is matched, every trade has a buyer and a seller. (When we say the market is buying or selling, we actually mean smart money is buying or selling.)”

It is uncertain whether hodling from two-year mining will cause the BTC market to build a stronger base for an extended rally or lead to a withdrawal. Coincidentally, shortly after hodling of Bitcoin miners reached highs in 2018, there was a deep correction to $ 4,000.

It is possible that miners hold more Bitcoin than usual simply because other miners and mining pools do. The data shows that relatively small pools hold more than $ 100 million in Bitcoins. CryptoCompare wrote:

“A third motive for miners accumulating more BTC are mining pools accumulating uncharacteristically large amounts of bitcoin.”

Until the BTC market receives a strong response from sellers, the accumulation of Bitcoins by miners is generally positive over the medium term.

You might also like: The Bitcoin Network Now Consumes 7 Nuclear Plants Worth of Power