Bitcoin: Growing adoption signals good news for miners
- The number of new addresses on Bitcoin hit a 3-month high.
- BTC miners have steadily moved their holdings to exchanges over the last month.
After an impressive start, which saw yearly highs getting touched, Bitcoin [BTC] has been stuck in the $30,000-$31,000 region over the past few weeks. The lack of volatility has disappointed the bullish and bearish forces of the market who are now waiting for a decisive move in either direction.
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However, despite the stagnation, Bitcoin’s adoption has been steadily growing lately. As per an update shared by blockchain analytics firm Glassnode on 13 July, the number of new addresses getting created on the network on a daily basis hit a fresh 3-month high.
Previous 3-month high of 20,895.304 was observed on 12 July 2023
— glassnode alerts (@glassnodealerts) July 13, 2023
The graph showed that the rate at which new players were entering the Bitcoin market has been steadily increasing since the beginning of July. If the favorable sentiment continued, there was a higher possibility of BTC surpassing the yearly peaks of April.
Will miners rejoice?
Bitcoin’s increasing adoption could be good news for battered BTC miners, who were dealing with reduced earnings and rising expenditures at the time of writing. More addresses could lead to a greater number of on-chain transactions.
Miners, as is well known, rely largely on network transactions to earn fees and mop up revenue, which is used to fund their heavy hardware and electricity costs. Of late, BTC’s sluggish price action and traders’ preference to HODL coins has affected their economics.
Miner earnings have trended downwards since the ‘BRC-20’ euphoria of May. Daily transaction counts have cooled off significantly. Although the spike in trading activity last weekend brought some respite, the soaring hash rate again made things difficult for miners.
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Miner outflows to exchange spikes
Miners earn in Bitcoin, but pay their costs and expenses in fiat. Hence, they are always on the lookout for positive market signals to cash out and make gains.
As seen in the CryptoQuant chart below, miners have been steadily moving their holdings to exchanges over the last month.