Latest On-Chain Data Shows HODLers And Miners Are Accumulating

The latest on-chain data shows that HODLers and miners are accumulating at these prices against a bullish backdrop and rising demand for the cryptocurrency so let’s read more in our BTC news today.

The data from the on-chain analytics platform Glassnode for the Miner Net Position metric tracks miner addresses to show the inflow and outflow that shows us that miners are net holders of BTC and they are not selling the asset. The metric was a reversal compared to the data from earlier this year as in January the miners were net sellers of the asset instead of the holders as BTC traded from $20K to over $40K. The selling dropped off a month later and remained insignificant since then.

Triple Maxi #Bitcoin Mining Strategy = (1) Keep all the BTC you mine (2) Issue Equity/Debt to purchase capital equipment & pay operating expenses (3) Issue additional Equity/Debt to acquire more BTC if/when accretive. #HODL https://t.co/wLX6PaMfLe

— Michael Saylor (@michael_saylor) April 4, 2021

The miners are entities or individuals with huge amounts of computing power at their disposal and they maintain the BTC network by validating the blocks and approving transactions thus receiving Bitcoin as a “reward in return.” The “mined” BTC is often sold to cover the costs that the mining farms incur like cooling charges, labor, and computing equipment. The new selling releases some new BTC onto the market and higher prices show us that lesser BTC needs to be sold to cover the losses.

#Bitcoin miners are continuing to HODL. pic.twitter.com/AahRS7M9wU

— Documenting Bitcoin 📄 (@DocumentingBTC) April 4, 2021

Miners are not selling BTC ideally which means that they have funds to maintain the rigs at the current prices and times. It also means that the new BTC is not released in the open market but that the supply is constrained while the demand remains the same which is a perfect condition for higher prices. There could be other financial incentives for the miners as Michael Saylor, Microstrategy’s CEO tweeted:

 “Maxi Bitcoin Mining Strategy = (1) Keep all the BTC you mine (2) Issue Equity/Debt to purchase capital equipment & pay operating expenses (3) Issue additional Equity/Debt to acquire more BTC if/when accretive.”

In the meantime, the latest on-chain data shows that miners and holders are hoarding BTC while other on-chain indicators suggest that the bull run could be just starting. As reported earlier, After the record-breaking $6.4 billion options expiry with the BTC price action being less volatile in the past few days. According to the BTC volatility Index with the 30-day volatility dropped from a high of 5.34% to 3.42% at the time of press.