Despite of FTX, bitcoin miners have sent less BTC to exchanges since the 2020 halving

Key points: 

• Bitcoin miners may be sending more bitcoin to exchanges this month — but overall, their sales have plummeted since 2020.
• Data from the on-chain analytics platform CryptoQuant confirms that the daily amount miners send to exchanges has dropped by two-thirds or more.
• The hash rate continues to run at all-time highs without a significant drop, suggesting that at least some miners are maintaining the network hashing power and not shutting down operations on a large scale.
• While the overall subsidy is halved and fees may represent a reduction in revenue in dollar terms, the trend in exchange sales is clear.
• So far, nothing has succeeded in forcing the exit of large-scale miners. That could change as the latest Hash Ribbons chart data shows hash rate trends leveling off after several months of growth.

Miners cool off as BTC exchanges sell-off after FTX surge

Existing concerns about miners’ solvency intensified after BTC/USD dropped 25% in a matter of days over the past week.

Given their cost base and rising hash rate, commenters warn that many mining players may not be able to make ends meet — block subsidies and fees are not enough to cover expenses, primarily electricity.

However, the fundamentals of the network tell a strange story - the hash rate continues to run at all-time highs without a significant drop, suggesting that at least some miners are maintaining the network hashing power and not shutting down operations on a large scale.

At the same time, CryptoQuant shows that Bitcoin miners are not desperately selling coins every day to make up for lost income.

On November 8, the day of the FTX blowout, a total of 1,300 BTC flowed from miners’ wallets to exchanges. It was the largest single-day record since September.

Overall, sales growth during the FTX crash was relatively modest compared to other peaks this year. On Sept. 2, miners sent 4,540 BTC to exchanges, while on June 22, around the time BTC/USD fell to a then-two-year low of $17,600, the daily total was 5,729 BTC.

When you zoom out, the image becomes more nuanced.

Since the last Bitcoin block subsidy halved in May 2020, miners have seen a significant reduction in daily transaction volume.

Before and after the halving, the 7-day moving average of miner exchange deposits was around 1,200 BTC per day.

This number varies widely from day to day, but in general, the November 2022 peak was common practice at the time.

Fast forward to October of this year, and on some days, miners sent less than 100 BTC to exchanges.

While the overall subsidy is halved and fees may represent a reduction in revenue in dollar terms, the trend in exchange sales is clear.

In other words, the FTX event only caused a brief divergence in miner outflow relative to its one-year moving average. This is summarized in CryptoQuant’s Miner Position Index (MPI).

A taste of the future?

The last time Bitcoin miners experienced “distress” — in terms of on-chain data — was in August.

The Hash Ribbons metric, designed to track miner capitulation, has remained outside its red zone since then.

So far, nothing has succeeded in forcing the exit of large-scale miners. That could change as the latest Hash Ribbons chart data shows hash rate trends leveling off after several months of growth.