Bitcoin miners’ share of transaction volume has dropped sharply recently

Market intelligence platform IntoTheBlock discussed the latest trends in Bitcoin miners’ share of transaction volume in a new post on its X platform. “Miners’ share of transaction volume” is an on-chain metric that tracks the percentage of miners’ transactions in total Bitcoin transaction volume (i.e. the total amount of Bitcoin transfers that occur on the network).

A chart showing the trend of Bitcoin miners’ share of transaction volume over the past decade shows that the value of this metric has shown a steep downward trend in recent weeks | Source: IntoTheBlock on X

As the chart shows, Bitcoin miners’ share of transaction volume briefly exceeded 20% during Bitcoin’s first quarter rally last year. This suggests that miners moved a large amount of Bitcoin on the chain, perhaps to seize profit opportunities brought by the bull market.

However, since this peak, the value of this metric has begun to decline. When Bitcoin entered a bull market again at the end of last year, the metric briefly rebounded, which also suggested that miners were cashing out. However, this sell-off was short-lived, which may mean that miners no longer have enough coins to sell. Another possible explanation is that the increase in activity across the network has led to a decrease in the share of miners' transactions.

As can be seen from the chart, this pattern has also appeared in previous bull markets, which further suggests that this trend may be caused by the increase in transactions caused by the increase in capital inflows during bull markets.

At the same time, it can also be seen that the peak of this indicator gradually decreases with each cycle. This may be related to the reduction in miners' rewards. Miners' rewards are subsidies obtained by solving blocks and are also the main source of their income. This subsidy is halved in each "halving" event.

The reduction in miners' income naturally means that the amount of capital they transfer on the network will also decrease, which is reflected in the share of transactions.

Currently, the share of Bitcoin miners' transactions has fallen below the 5% mark, which is lower than the bottom of the 2017 cycle. But it has not yet reached the lowest level during the 2021 bull market.