With the recent approval of spot Bitcoin ETFs, traditional investors are no longer turning to crypto-friendly mining stocks as a proxy to access BTC directly.

Publicly traded Bitcoin (BTC) mining companies have historically been a popular gateway for investors to get exposure to the leading cryptocurrency without actually owning it. However, the landscape has shifted significantly with the approval of spot Bitcoin exchange-traded funds (ETFs).

In a recent statement to Global Crypto News, Alessandro Cecere, a marketing specialist at Bitcoin mining services firm Luxor Technologies, mentioned that the market seems to be factoring in the upcoming fourth halving, scheduled for mid-April. As a result, investors are no longer relying on stocks of public mining companies to gain exposure to Bitcoin as they once did.

“The market may now be starting to price in the 4th halving, and now that Bitcoin ETFs have been approved and experienced a successful launch, investors aren’t forced to obtain exposure to Bitcoin through mining stocks, leading to a reduction in the average premium to BTC spot they used to have.” – Alessandro Cecere

As highlighted by CryptoQuant CEO Ki Young Ju, there has been an increase in miners’ selling activity since 2012, indicating growing selling pressure on Bitcoin. However, Ju believes that the current bullish trend is likely to continue unless there is a slowdown in ETF inflows. He also pointed out that U.S. mining companies are not the primary sellers of Bitcoin, suggesting that offshore or older miners might be driving the selling pressure.

Addressing these developments, Cecere explained that publicly listed miners have the advantage of issuing new shares to raise capital, a strategy not available to private miners. This distinction could be why U.S.-based mining companies have not yet started selling their crypto holdings.

“With interest rates at high levels compared to the last bull market, issuing new debt is not as attractive anymore, this might explain why overseas miners are selling Bitcoin as they prepare for a significant reduction in revenues after the halving.” – Alessandro Cecere

Following Ki Young Ju’s observations, Bitcoin’s price dipped below $70,000 on Mar. 14. At the time of writing, BTC is trading at $68,230 according to CoinMarketCap.

For more insights and updates on the cryptocurrency market, stay tuned to Global Crypto News.

Post Views: 4