Bitcoin Mining Progress Reaches 89% — Do Miners Still Have Influence?

Previously, CryptoQuant tweeted that the amount of Bitcoin flowing from miners to exchanges is at its lowest point in a year, having declined from its peak in May. This suggests miners are Bitcoin .

We all know that since the first Bitcoin was mined on January 3, 2009, Bitcoin has undergone three halving events, with block rewards declining from the initial 50 coins to the current 6.25 coins. At Bitcoin's average block time of 10 minutes, the current daily global miner output is approximately 900 Bitcoin .

OKX market data shows that spot BTC /USDT has a 24-hour trading volume of 22,600 coins. Even if miners were to sell their entire daily output through "mine and dump," the impact on the market would be negligible.

Currently, Bitcoin's circulating supply stands at 18.7297 million coins. Compared to the 21 million cap, Bitcoin's mining progress has reached 89%, with only 2.2703 million coins remaining unmined. If Bitcoin halves again in four years, daily production will drop to just 450 coins, making daily miner selling pressure even more negligible. As miners transition from producers to network service providers, do they still hold significant influence? Which miner indicators can we reference? And what happens once Bitcoin is fully mined? Let's explore these questions today.

Miners Are Natural Sellers, But the Volume Flowing to Exchanges Is Small

Bitcoin has no centralized issuing body — all issuance is generated through mining competition by network miners. Since miners primarily acquire Bitcoin through mining rather than purchasing, and the costs of mining (mining equipment, electricity, rent, etc.) are denominated in fiat currency while their revenue is in Bitcoin, miners are natural net sellers.

In the past, whenever coin prices dropped, people would immediately think of miner selling. This was because Bitcoin's market cap was smaller at the time, miners held more tokens, and new Bitcoin was continuously being produced daily. Their selling signals often came with group behavior, making their impact on the market substantial. However, as this bull market took off and institutional players led by Grayscale began aggressive buying, the market shifted its focus to institutions.

Take Grayscale as an example. According to The Block data, Grayscale held 448,400 Bitcoin on October 1 of last year, and by February 1 of this year, its holdings reached 648,000 Bitcoin — an increase of 199,600 Bitcoin over four months, or approximately 1,621 Bitcoin added daily. During the same period, based on Bitcoin's average block time of 10 minutes and a block reward of 6.25 coins, daily production was 900 Bitcoin — Grayscale's daily demand was 1.8 times miner output. And Grayscale was clearly not the only buyer at the time. Companies like MicroStrategy, Square, and Tesla placed buy orders worth tens of millions of dollars, exacerbating the supply-demand imbalance. The direct result was that Bitcoin surged from an opening price of $10,777.7 on October 1 to a closing price of $57,142.1 by the end of April — a gain of 430%.

CryptoQuant data shows that Bitcoin miners currently hold reserves worth approximately $3.124 billion. In comparison, OK Link records institutional Bitcoin holdings at $16.816 billion, accounting for 2.75% of Bitcoin's total market cap. Clearly, institutional holdings already exceed miners' on-chain Bitcoin deposits.

BTC: All Miners Reserve (USD)

Coin Metrics published an article in late February titled "FOLLOWING FLOWS II: WHERE DO MINERS SELL?" — primarily aimed at assessing the scale and impact of miner selling. The article concluded that given the small ratio of miner deposits to total exchange inflows and the lack of correlation between miner exchange inflows and price, it can be essentially confirmed that miners are not the cause of Bitcoin's decline.

This is also evident from recent on-chain data. Combining Glassnode and CryptoQuant data, miners produced a total of 6,300 Bitcoin over the past seven days, while only 1,724.98 Bitcoin flowed to exchanges. Compared to the total Bitcoin exchange inflow of 205,200 coins over the same period, miners' Bitcoin flowing to exchanges accounts for less than 1%.

Mining Progress at 89% Complete — Market Price Influenced by Short-Term Speculators

CoinMarketCap data shows that 89% of Bitcoin has already been mined, with only 2 million or so Bitcoin remaining to be mined. As halving occurs every four years, Bitcoin's daily production will only continue to decrease. Since we already know the volume of Bitcoin flowing from miners to exchanges is small, the declining influence of miners is an undeniable fact.

We all know that Bitcoin's initial bull run was driven by strong buying pressure. But now that Bitcoin has entered a nearly two-month downward trend, it can only mean that supply far exceeded demand during this period. As natural sellers, miners are naturally on the supply side. However, even as miners are holding back from selling, Bitcoin's price continues to decline and exchange balances are rising — who is doing the selling?

Several years ago, when Jiang Zhuo'er explained Bitcoin to the public, he discussed Bitcoin's supply and demand dynamics. He categorized Bitcoin demand into three types: (1) purchasing Bitcoin for store of value and investment, to hedge against inflation; (2) purchasing Bitcoin for use cases such as payments, cross-border remittances, and settlements; and (3) purchasing Bitcoin for speculation and trading. Bitcoin supply, on the other hand, falls into two categories: (1) miners selling their mining proceeds; and (2) holders who purchased Bitcoin for store of value, investment, or speculation selling their holdings. Category (3) on the demand side and category (2) on the supply side are the primary drivers of Bitcoin's price volatility.

Yesterday, in our article "Market Continues to Weaken — Who Is Selling Bitcoin?" , we mentioned that Tesla sold 10% of its Bitcoin holdings in Q1 2021, generating $272 million in revenue and $101 million in profit. UK asset management firm Ruffer disclosed that it invested $600 million to purchase Bitcoin in November 2020 and sold its final Bitcoin position in April, ultimately realizing total profits exceeding $1.1 billion.

Glassnode's Week 22 weekly report noted that throughout May, a total of 155,000 Bitcoin transitioned from holding to liquid or highly liquid states, with short-term holders increasing their selling volume by more than 5x during this sell-off — consistent with Jiang Zhuo'er's supply category (2). In other words, this decline was caused by users who purchased Bitcoin for investment or speculative purposes (such as institutions that entered during the early bull run or retail investors who followed institutional进场) choosing to take profits when their gains were substantial, or exiting when they perceived greater risk than opportunity ahead.

As more Bitcoin is mined and secondary market circulation far exceeds what miners hold, miner influence is weakening. But why should we still monitor miner indicators?

First, Bitcoin mining requires substantial human and material resources and cannot be easily shut down in the short term. Once mining begins, it runs on a multi-year basis. Therefore, miners are viewed as Bitcoin's most dedicated supporters, or at least as a group that believes in Bitcoin's future prospects. When miners begin aggressively selling Bitcoin, it often signals pessimism about Bitcoin's future. As an indicator akin to market faith, wavering miner sentiment can also influence retail investors' decisions.

Second, miner indicators can serve as a tool for identifying bull market tops and bear market bottoms. For example, in our article "Market Forces Balance, Price Action Arrives at a Crossroads" , we introduced the Puell Multiple — an indicator developed to track miner activity. The Puell Multiple is calculated by dividing Bitcoin's daily issuance price (in USD) by the 365-day moving average of the daily issuance price, measuring miners' profitability.

A high Puell Multiple indicates high profitability — at such times, miners accumulate Bitcoin at a cost far below market price and have an incentive to sell for greater profits. A low Puell Multiple indicates low profitability — in this situation, miners face revenue pressure. If pressure persists, they may be forced to shut down mining equipment, eventually leading to exit and forming a bear market bottom. Of course, miner indicators can also serve as a reference for market supply-demand transitions, helping to identify where selling pressure is coming from.

Lastly, unusual activity from early miner addresses still commands attention in the community. The famous "疑似中本聪地址抛售Bitcoin" event that once occurred in the space caused Bitcoin to crash in the short term. If an address dormant for over a decade suddenly becomes active, empties its wallet, and transfers to an exchange, it will inevitably attract market attention. Even today, there remains a group of people dedicated to studying Satoshi's mining behavior — this too is part of what constitutes the faith indicator.

Bitcoin Miner Revenue Falls Short of Ethereum — What Happens After Mining Is Complete?

Recently, The Block published on-chain data for May, showing that Ethereum surpassed Bitcoin across multiple metrics — one being that "Bitcoin miner revenue fell 15% to $1.45 billion, while Ethereum miners posted record-high revenue of $2.35 billion in May."

We all know that current Bitcoin and Ethereum miner revenue consists of two components: block rewards and transaction fee income. In the charts below, transaction fee revenue is shown in red and block rewards in blue. Ethereum's red segment has been growing notably, with transaction fees on Ethereum reaching $1.03 billion in May, accounting for 43.8% of total revenue — Ethereum's transaction fee income and block rewards appear increasingly balanced. For Bitcoin, miner revenue is still dominated by block rewards. Using May as an example, transaction fees totaled less than $124 million, accounting for only 8.6% of total revenue.

Bitcoin Miner Revenue (Monthly)

Ethereum Miner Revenue (Monthly)

We all know that the significant increase in transaction fees on Ethereum is closely tied to the growth of the DeFi ecosystem and surging on-chain activity — which also aligns with Ethereum's transition roadmap. But turning to Bitcoin, we can't help but wonder: since everyone knows there will come a day when Bitcoin is fully mined, once all Bitcoin has been issued, miner revenue will come entirely from transaction fees. Since miners are the primary force maintaining Bitcoin's network security, their incentive to participate in the Bitcoin network is driven by revenue. Unless Bitcoin prices continue to rise substantially, on-chain revenue alone will struggle to provide sustained motivation. Additionally, Bitcoin has limited on-chain applications — Omni-layer USDT activity is far less than ERC20 and TRC20 USDT activity. A large amount of Bitcoin has also been wrapped and bridged to the Ethereum network to participate in DeFi activities, further reducing Bitcoin's on-chain activity. Glassnode data shows that Bitcoin's on-chain active address count has fallen to its lowest level in nearly a year, and declining network activity will also reduce transaction fee revenue.

So, what happens after Bitcoin is fully mined? According to the original vision, even once all Bitcoin has been issued, as long as there is sufficient trading demand, miners will have reason to continue mining. Moreover, due to Bitcoin's deflationary mechanism, Bitcoin's price will continue to rise, and transaction fee revenue will naturally increase accordingly.

However, during this bull market, we can clearly observe that Bitcoin's on-chain trading volume has not increased significantly compared to the previous bull market, whereas Ethereum's trading volume has seen a notable surge.

Bitcoin: Number of Transactions

Ethereum: Number of Transactions

Additionally, Bitcoin's transaction fees are affected by byte size and network congestion. Currently, Bitcoin transfers charge 0.0001 BTC per kilobyte. If too many people are transacting on-chain and the network becomes congested, users will pay higher fees to prioritize their transactions for inclusion in blocks. If Bitcoin's price continues to rise — say to $100,000 — fees per kilobyte would reach $10.

OK Link data shows that Bitcoin's average daily transaction fee on June 7 was 0.000128 BTC per transaction, approximately $4.25.

Average Daily Transaction Fee

Clearly, Bitcoin has evolved from Satoshi Nakamoto's envisioned medium of value exchange into a store of value. If Bitcoin continues to appreciate, on-chain fees will naturally increase as a result. But how high would fees need to rise before on-chain transaction fee revenue becomes the primary source of miner income and continues to incentivize miners to produce new blocks after Bitcoin is fully mined? We cannot provide a specific figure at this time. Moreover, rising Bitcoin prices could also reduce or draw criticism for on-chain activity due to high fees. Additionally, because of Bitcoin's low TPS, some high-frequency applications have already migrated elsewhere — such as Omni-USDT. Ethereum DeFi has also locked a portion of Bitcoin permanently on-chain, while HODLers prefer to accumulate Bitcoin rather than use it. One can only imagine what on-chain activity looks like. Sufficient trading demand, sustained price appreciation, and the development of alternative chains — the relationship between these three factors may become a significant constraint on Bitcoin network development in the future.

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