With insights from a market report by Bitfinex, a cryptocurrency exchange, Bitcoin (BTC$30,147) mining companies are expected to offload BTC to exchanges, as a part of their derisking strategies,stated Cointelegraph.
Sources revealed that there has been a recent surge in miners selling large volumes of BTC to exchanges. Eventually, this has led to a corresponding increase in the value of shares in Bitcoin mining companies as institutional interest in BTC picks up in 2023, Cointelegraph added.
It is expected that the “Miners are clearly bullish on Bitcoin as they commit more resources to mining, hence triggering the mining difficulty, but they are hedging their position, hence the despatch of more Bitcoin to exchanges,” Cointelegraph highlighted.
According to Cointelegraph, the increase in mining difficulty shows that a new mining power has been added to the Bitcoin network. Supposedly, this is seen as a sign of increased network health and is also expected to increase confidence in the profitability of mining, either by increased BTC prices or developed hardware.
(With insights from Cointelegraph)