Bitcoin Mining Pool Outflows Surge Just Before Bitcoin Dips Back Below $10,000
Summary
- Unknown Bitcoin mining pools saw a significant Bitcoin outflow before Bitcoin’s fall back below $10,000.
- Bitcoin mining pools may be “cashing out,” reigniting the Bitcoin miner capitulation discussion.
According to a tweet by Ki Young Jun, CEO of crypto analytics firm Crypto Quant, unknown Bitcoin mining pools saw a surge in outflows as Bitcoin surged past $10,000. However, Bitcoin’s rally above $10,000 was short-lived as the cryptocurrency fell back to $9,500 hours later.
The CEO also added that the largest unknown mining pool only moves coins when Bitcoin’s price is high. Interestingly, the price of Bitcoin fell shortly after the large outflow, possibly the result of the mining pool cashing out.
Unknown mining pools still account for a significant part of the Bitcoin Network’s total hash rate. Unknown mining pools include massive Bitcoin mining farms that have enough hash power to solo mine, effectively becoming an unknown mining pool. These farms can alleviate the fees mining pools generally charge.
Bitcoin Miner Capitulation
Bitcoin miner capitulation has been a hot topic following the Bitcoin halving event. Following the halving, Bitcoin’s block reward fell from 12.5 Bitcoin to just 6.25 Bitcoin per block. As a result, Bitcoin mining revenue has plummeted, resulting in miners leaving the Bitcoin network.
As discussed by Johnson Xu (Chief Analyst at TokenInsight), the Bitcoin market sentiment has begun to die down following the halving. Despite the price decline, the overall Bitcoin mining sentiment still remains positive as the “wet” season in China begins. The “wet” season may be attributable to the recent surge in Bitcoin hash rate despite the declining price. Thus, it seems that Bitcoin miners are not capitulating and are continuing to mine on the Bitcoin network helping secure the world’s largest proof-of-word blockchain.
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