Key Insights:

• Bitcoin miners facilitated $35.9B OTC trades, shaping market liquidity post-ETF launch.

• On-chain analysis reveals miners' role as significant liquidity providers to OTC desks.

• Miners' pivotal position in stabilizing BTC markets underscores their influence on crypto finance.

A recent analysis of cryptocurrency transactions has uncovered evidence tying Bitcoin miners to over $35.9 billion worth of OTC (over-the-counter) trades in the weeks following the launch of the first U.S. Bitcoin futures ETF.

The enormous volume of off-exchange deals highlights miners' influence on markets as large BTC holders and liquidity providers.

Tracing On-Chain Transactions

Blockchain analytics firm CryptoQuant recently tracked large BTC transactions from mining pools to OTC brokerages after the debut of the ProShares Bitcoin Strategy ETF..

Miners reportedly sent thousands of coins to trading desks at major liquidity providers like Cumberland and Circle. The OTC desks likely purchased the Bitcoin from miners and then sold futures contracts to the ETF issuer.

Martin Chen, CryptoQuant’s CEO states that the on-chain trails can be followed since the timing is perfectly aligned with miners providing ample liquidity to brokers to meet ETF demand.

In the two months following the ETF launch, nearly $36 billion worth of BTC moved from miners to OTC desks. This dwarfed previous miner-broker flows.

Miners Stabilize and Supply Bitcoin

As the primary producers of new Bitcoin, miners hold substantial BTC reserves and remain active traders in servicing demand. Crypto investment products like ETFs rely heavily on OTC desks and miners for liquidity.

"Miners play a key role as sellers of last resort, absorbing market downturns and providing pockets of stability," explained economist Ali Winston. "Their ample reserves and high turnover make them ideal partners for meeting institutional demand."

Large public miners also face regular selling pressure from ongoing costs and limited revenue options beyond selling BTC. This drives steady outflows to brokerages. However, miners avoided exchanges during the ETF launch, signaling deliberately managing supply.