Bitcoin Price Dips as Miners Sell Before Halving: Bitfinex

The price of the largest cryptocurrency, Bitcoin, declined as miners sold amid preparations for the upcoming halving, according to Bitfinex analysts.

“The factors influencing BTC outflows from miner wallets are multifaceted. [including]…the need for operational liquidity for miners as well as varying responses to market conditions and adjustments following the approval of Bitcoin ETFs.” Bitfinex Alphahttps://t.co/PLl8v4WIPi

— Bitfinex (@bitfinex) February 6, 2024

The recent green light given by the SEC for spot Bitcoin ETFs prompted miners to capitalize on the surge in BTC value to exit their positions, resulting in significant outflows from miner wallets.

These sales are aimed at generating capital for miners to upgrade their infrastructure, preparing for reduced profitability following the imminent halving in April.

The halving, occurring roughly every four years, will slash miner rewards by 50%, reducing the current 6.25 BTC per block to 3.125 BTC.

This programmed mechanism, intended to constrain Bitcoin supply and heighten scarcity, has motivated miners to unload reserves, impacting market liquidity. Despite a 1% decline in the past 24 hours, Bitcoin has rebounded and is now valued at $43,093.

The market remains vigilant for potential further selling as miners adapt to the forthcoming reduction in rewards within their Bitcoin mining operations.