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- The portion of block rewards coming from fees rose to a six-month high of 27%.
- Since the late October rally, more than 5,000 BTC coins have been unloaded by miners.
Bitcoin [BTC] soared past $37,000, continuing the bull run that saw King Coin gain more than 34% over the past month, according to CoinMarketCap. While BTC retreated to the $36,000 zone at the time of writing, the market was optimistic about further gains in the near term.
The hash price spikes to a six-month high
The rally also got a thumbs up from Bitcoin miners. This was due to the subsequent increase in Bitcoin’s hash price, which is seen as an important barometer of miner profitability.
According to the Hashrate Index, the hash price exploded to $91 per PetaHashes per day (PH/day), the highest in six months. Furthermore, this represented a significant increase of 27% compared to the previous week.
Source: Hashrate index
Hashprice is a well-known mining metric that quantifies how much a miner can expect to earn from a specific amount of hashrate. It is positively correlated with changes in Bitcoin’s price, which explains its significant increase in value.
More costs for miners
In addition to the price of Bitcoin, the hash price is also directly related to the transaction fees that miners earn.
As shown below, the share of block rewards coming from fees has risen sharply over the past ten days, reaching a six-month peak of 27% on November 9.
Source: Hashrate index
Miners use block rewards to cover costs associated with mining equipment and electricity. Therefore, they routinely liquidate their assets to raise cash.
However, during phases of low volatility, when returns are not great, miners sit on their stocks and wait for a rally to distribute coins to the market.
Miners are cashing out
AMBCrypto analyzed CryptoQuant data and noticed a clear decline in the number of coins in miners’ wallets since the late October rally. Since then, more than 5,000 BTC coins have been unloaded by miners.
Read BTC price forecast for 2023-2024
This served as evidence that miners were selling aggressively to reap the benefits of the higher prices.
Source: CryptoQuant
Recall that miners struggled to navigate the crypto winter of 2022, with revenues plummeting to unforeseen depths. The 2023 revival was much needed as the financial well-being of miners is closely tied to the security and decentralization of the Bitcoin network.