The total volume of Crypto Cash miners‘ transfers to exchanges has decreased significantly. According to data from the Glassnode company, the reduction was noticeable after the Halving in May.
Exchanges have generally been a reliable thermometer for measuring Bitcoin prices in the short term. For this reason, it is important to take into account the amount of Bitcoin that the miners are exchanging or sending to these exchange houses.
It’s also relevant to note that, in most cases, if the amount of Bitcoins saved is greater than the amount exchanged, then the price tends to rise. Conversely, if the flow of cryptosystems to the exchanges increases, then the price falls.
What is the relationship between an exchange and the price of Bitcoin?
Exchanges are virtual platforms that serve to make exchanges between crypto-currencies and trust money. Similarly, they are used to exchange one type of digital currency for another.
Exchanges are made directly between the user and the platform and, on the other hand, between users with each other (P2P) with the mediation of the exchange. It all depends on the type of company and its qualities.
As said, the volume of Bitcoin miners‘ transfers to the exchanges is useful in determining the price of cryptomoney. Although this is not an exact measurement and it works in 100% of the cases, in general terms, it tends to coincide.
If the Bitcoins that the miners are generating are being sent to the exchange platforms in greater numbers, the price will be low. If the miners prefer to treasure them, then the price of Bitcoin will go up. In other words, in the first case, the number of Bitcoins available for sale is surplus and in the second case it is scarce.
According to the well known (and used) law of supply and demand, it follows that the smaller the variety of supply, the more expensive the product. And vice versa, the more abundant the supply, the lower the price of the goods. In this case, Bitcoin.
There is a wide range of virtual platforms that provide the exchange service. According to the BeInCrypto portal, the list is about 364 exchange platforms. Determining which is best depends very much on user preferences. The most used ones, according to the list on the Cryptocompare portal, are itBit, Gemini and Coinbase.
Over 89% of existing bitcoins generate profits
What is the status of the transfers from Bitcoin miners to the exchanges?
Taking into account the direct relationship of the exchanges with the price of Bitcoin, we will now see the status of the trade in cryptomoney. Glassnode metrics show that before Halving, the figure for transfers from Bitcoin miners to the exchanges per day was 451 BTC.
After the four-year cut on May 11, that figure dropped drastically. From the 451 BTCs sent to the exchanges on 9 May, the amount was reduced to about 172 BTCs on Thursday 11 June.
However, the impact of Halving must be taken into consideration. After this cut, the reward in Bitcoins per mined block was halved. The 12.5 BTC payment that miners received before May 11 each time a block was mined is now 6.25 BTC.
This means that, if before Halving, the daily production of Bitcoins was about 1,800, now it is 900. In the first case, if 1,800 Bitcoins were produced in one day, then the transfers of Bitcoin miners to the 451 BTC exchanges represent 25% of those produced.
After Halving, and with a daily production of 900 Bitcoins, the 172 crypt coins sent to the exchange platforms this Thursday, represent 19% of what was produced. In other words, the reduction between both dates of the amount sent by the miners to the exchanges is 6%.