The impact of Bitcoin miner selling pressure during bull and bear markets

In my third piece on the drivers behind the Bitcoin price, I am looking at the impact of the miners on the market. So far in 2019, they have mined 159,688 new coins at an average rate of 1,835 each day. Yet they have “spent” (distributed into the network and probably sold) 172,295 coins, which is 12,607 more than they mined. The point is that a miner can create new coins, but until they are spent, they are not circulating in the network, and are effectively idle.

We can monitor when the coins are spent because they are transferred from the address that they were created in. I am assuming that they are sold, as miners are profit seeking. But in some cases, they might have been distributed to the shareholders who didn’t then sell. I’ll assume that’s in the minority of cases as most newly created coins end up being sold. In any case, at ByteTree, we refer to this transfer as coins being spent. You can see the difference between the number of coins mined and the coins that have been spent below.


Since 2009, 17,615,179 Bitcoins have been mined and 16,029,692 have been spent. The difference between them is 1,585,487 coins which have never changed hands. Some presumably belong to Satoshi, Bitcoin’s creator, and others may even be lost. But for whatever reason, over 1.5 million bitcoins worth over $6 billion, have never touched the network.


That number seems to be falling over time, and when too much comes too soon, the price of Bitcoin falls, as there is more selling pressure than the market can handle. And if those Bitcoins were to come to market all at once, the price would collapse and remain low until the excess inventory had time to clear. Fortunately that hasn’t happened, but you can see the impact of excess miner inventory selling during bull and bear markets.

Generally speaking, the miners have been good traders, and have offloaded their excess inventory into market strength. Then when prices began to fall, they have tended to resist selling, and have waited for strength to return. But when that has failed to materialise, they have panicked and dumped their coins into a falling market.


We’ve seen this repeated over the past five years. In 2013, Bitcoin soared and the miners sold 150,000 more coins than they mined during the year. That is they spent 1,736,216 coins, having mined 1,585,826 coins. And they were wise to do so. Then when 2014 came, the price collapsed, and the miners held back, growing their inventory in the process. But as you can see, they capitulated in August, and sold into a weak market. That had a devastating impact, driving the price below $200.

The 2014 Bitcoin price collapse was fuelled by miner selling

Source Bloomberg

And then the cycle repeated itself. The miners off loaded their stock into the strength of 2017, only to hold back when the bear became clear in early 2018. You can see them maintaining discipline, a bit like OPEC, right up until 14 November when they started to dump.

The 2018 Bitcoin price collapse worsened when the miners capitulated

Source Bloomberg

On the whole, I don’t think its right to worry about miner selling pressure for two reasons. The first is that the market can absorb 1,835 new coins each day. I know that because if it couldn’t, the price to fall to a level where it could. It’s its a free market and the price is determined by the actions of buyers and sellers. And secondly, the supply of new Bitcoins is forever falling. The current rate of inflation is 3.9%, which will fall to below 2% next year.

There are drivers for Bitcoin on both the supply and the demand side. One of the great things about Bitcoin analysis, is that supply is so easy to understand. But now we know that the miners don’t have to sell immediately and their inventory acts as a counter balance — at least most of the time. So some supply side analysis is still important. The harder bit is demand. And for that, you will need a crystal ball. Or ByteTree.

Follow the miner spending patterns and many other metrics, please visit The data set has been under construction since November 2013 (no typo). There’s much more coming that will help you to better understand the value of the crypto using data directly from the blockchain. Caveat Emptor.

Thank you for reading.

Charlie Morris, Founder and CEO

Applied data for digital asset investors. ByteTree provides real-time data, fundamentals, technical and deep blockchain market analysis for Bitcoin, and more.