In proof of work blockchains such as Bitcoin, miners play a key role by validating transactions and contributing resources to secure the network. In compensation for their contributions, miners are rewarded with coins which are issued every block. More details on how mining and the Bitcoin halving work can be found in this article.
IntoTheBlock has built a proprietary machine learning algorithm that identifies miners’ addresses and monitors their holdings and activity. For Miner Inflows, IntoTheBlock tracks funds flowing into miners’ addresses in dollar or crypto terms. This includes the amount miners earn from rewards, but also other transfers such as buying crypto.
Bitcoin Miner Inflows
The Miner Inflows metric is helpful to track inbound activity from miners. While miners in aggregate have a stable flow from the amount of crypto they mine, their incoming transactions tend to vary a lot and can reflect miners’ positioning.
For instance, in the example above we see miner inflows spike on May 19 and drop severely after. While the spike may be difficult to explain, the drop afterwards came after the Chinese crackdown began. This decrease suggests that miners understandably switched to a cautious position following the disruption of miner activity in China.
This drop led to a yearly low in inflows in early June, and another low in early July. Potentially, this could indicate that miners remain cautious following the Chinese mining crackdown.