Miner Outflows


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 Outflows, IntoTheBlock tracks funds flowing out of miners’ addresses in dollar or crypto terms.

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Since miners have been accumulating crypto since the early days, Miner Outflows can show valuable patterns of how they manage it. In the graph above, there are two or three spikes in miner outflows.

Miner outflows can suggest miners are transferring out part of their crypto holdings into exchanges to sell. In this case, one spike occurred right before the first announcement of the Chinese crackdown on mining on May 19, hinting at the possibility that some miners may have been aware of the regulations coming.

Then on June 7 and 15, miner outflows spiked again as the mining ban went into effect. This pattern points to miners selling part of their Bitcoin holdings in light of the crackdown. Given that sending miner equipment internationally can be expensive, it is likely that the spike in miner outflows was due to miners covering these costs by selling their positions.

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