What impact do miners have on the Bitcoin price market?

A new report from cryptoasset hedge fund Paradigma Capital takes a deeper look at the impact Bitcoin miners have on the market. The study highlighted that miners control a small share of on-chain volume, and when off-chain volume is taken into account, bitcoin miner volume is minuscule.

Paradigma carried out a correlation analysis to assess if there is any association between miners moving funds to exchanges and bitcoin price returns. While little to no association was found, the answer may not be as straightforward as “miner behaviour has no impact on bitcoin price”. CEO of Blockware Solutions Matt D’Souza pointed out that miners movement of capital holds more importance than off-chain trading volume as it represents fresh supply applying sell pressure on the market.

Why it matters:

• Assessing miner behaviour to gain an edge in the Bitcoin market has become a popular strategy used by analysts. This study puts miners share of the Bitcoin market into context.
• While the findings of the study are clear, the impact miners have on the Bitcoin price market is a more nuanced debate with mining professionals arguing movement of miner’s funds hold significantly more importance than trading volume.