Mining Pools Hoarding Bitcoin Since November, BTC Balance Jumps by 103%: Chainalysis
The third Bitcoin halving is past us and the block reward is now officially 6.25 BTC which means miners profitability is shot by 50% and there will only be an inflow of 900 BTC per day now.
The after-effects can already be seen in the bitcoin market, with the hash rate declining over 20% after hitting a new all-time high yesterday.
Bitcoin’s price has also dropped from $10,000 last week to about $8,700. The reduced price means miners' margins are cut down requiring them to expend the same resources for half the reward.
But interestingly, mining pools have been holding more bitcoin before the halving suggesting mining pools believe post-halving surge is on its way, as per the latest report by Chainalysis.
Holding more BTC than selling it off
The aggregate balance of all mining pools first started changing in the lead up to the halving in October 2019.
Throughout October and into mid-November, the total amount of bitcoin held by mining pools hovered around 10,000 BTC. But from there onwards, balances started climbing steadily, indicating miners have been holding more BTC they generated than selling it off.
This trend intensified around March 12, the day bitcoin crashed about 50%. Mining pools actually started holding even more bitcoin that has their collective balance at 17,422 BTC on May 6, 2020, compared to 8,579 BTC on Oct. 29, 2019.
The number of days mining pools held each new bitcoin they acquired before selling also rose to 3.68 days by the week of March 1 from 2.24 days during the week of Oct. 6. In May, this further increased to 5.74 days, more than double that it was in early October.
F2Pool & Poolin Leading the Trend
The Chainalysis report further found that individual mining pools are driving the trend with F2Pool miners mining more Bitcoin than any other pool since Oct. 1, “taking in 17% of all Bitcoin generated since then.”
F2Pool currently accounts for 39% of all BTC held by mining pools, with a current balance of 7,109 BTC. It started increasing holding more BTC in mid-Nov. Only to double down on March 12.
The second-largest mining pool, Poolin follows F2Pool which is taking just under 17% of all bitcoin generated since Oct.
Poolin’s current balance is 5,272 BTC, accounting for 29% of all Bitcoin currently held by mining pools.
Polar Opposite of 2016 Halving
This is completely different from the last bitcoin halving in July 2016 where Mining pools sold their BTC for the first few months of the year, the aggregate balance fell from 421,132 BTC on January 1 to 46,955 BTC by April 16.
But it grew steadily through May and June only for the most of it to be sold off by mid-June, weeks before halving.
One mining pool, HaoBTC, ninth-largest mining pool by BTC received at that time, did hold more BTC in advance of halving, taking in 2% of the total mined. It’s BTC balance jumped from 1,000 BTC in late March 2016 to 2,337 in early July — HaoBTC also launched an exchange in April 2016.
Post-2016 halving, their balance constantly hovered between 2k to 3k BTC only to be sold off by February 2017, remaining just 920 BTC.
HaoBTC yet again repeated its strategy and started holding more bitcoin before the 2020 halving. Its bitcoin balance which was between 600 and 1,000 BTC before April spiked to 1,787 BTC on May 1.
Just like many bitcoin holders, looks like these mining pools are also expecting 2020 halving to signal another bull run.