- The portion of block rewards coming from fees leaped to a six-month high of 27%.
- More than 5,000 BTC coins have been offloaded by miners since the late-October rally.
Bitcoin [BTC] blasted past $37,000 in continuation of the bull run which has seen the king coin gain more than 34% over the last month, according to CoinMarketCap. While BTC retreated to the $36,000 zone at press time, the market was optimistic of further upside in the short-term.
Hashprice spikes to six-month high
The rally also got a thumbs up from Bitcoin miners. This was because of the subsequent boost to Bitcoin’s hash price, seen as an important barometer of miners’ profitability.
According to Hashrate Index, the hashprice exploded to $91 per PetaHashes per day (PH/Day), the highest in six months. Moreover, this represented a significant increase of 27% over the last week.
Hashprice is a well-known mining metric that quantifies how much a miner can expect to earn from a specific quantity of hashrate. It is positively correlated with changes to Bitcoin’s price, thus explaining the significant jump in value.
More fees for miners
Apart from Bitcoin’s price, hashprice is also directly related to transaction fees earned by miners.
As shown below, the portion of block rewards coming from fees has increased sharply in the last 10 days, climbing to a six-month peak of 27% on 9th November.
Miners use block rewards to cover the costs associated with mining equipment and electricity. Hence, they routinely liquidate their holdings to raise cash.
However, during phases of low volatility when the returns aren’t great, miners sit on their stashes and wait for a rally to distribute coins into the market.
Miners are cashing out
AMBCrypto analyzed CryptoQuant data and noticed a marked drop in coins held in miners’ wallets since the late-October rally. In fact, more than 5,000 BTC coins have been offloaded by miners since then.
Read BTC’s Price Prediction 2023-24
This served as evidence that miners were aggressively selling to reap the benefits of the increased prices.
Recall that miners had a tough time navigating the crypto winter of 2022, with revenues tumbling to unforeseen depths. The revival in 2o23 was much-needed as miners’ financial well-being is closely tied to the security and decentralization of the Bitcoin network.