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What does the continuous rise in the MRI index of miners selling Bitcoin inventory indicate? According to the data website byte
tree, miners have sold more inventory coins than newly mined coins for many consecutive days since March 24. This indicates that Bitcoin has rebounded to its peak since the plunge on March 11, and miners have sold their unused inventory Bitcoin to recover funds and are pessimistic about future price trends.

According to Digital Assets Date data, the MRI index (Miner's Rolling
Inventory) was greater than 100 within 12 days when the price of Bitcoin rose from US$3,800 to US$7,000. The MRI value is based on the first-time spending of Bitcoin (miner’s 1st
spend) in the same period of time and the newly mined Bitcoin (generation) in the same period of time multiplied by 100. The time is usually selected from 3 to 6 weeks. If it is greater than 100, it means that miners have sold more first-time spending Bitcoin than newly mined Bitcoin. If it is less than 100, it is the opposite.

For example, over a six-week period, these miners generated (mined) 76.963 new bitcoins, while first spends saw 78.342 bitcoins added to the network. Therefore, 2% more bitcoins were "spent" than mined. At this point, Bitcoin's six-week MRI run rate is 102%.

Unspent inventory and first spend

When miners mine a block, they get a block reward. These are newly minted bitcoins that have never been spent (transactions sent). Before they are used, they are unspent inventory, which we can simply call inventory. When they are first spent, they appear in the form of first spend. Every future spend becomes general spend or transaction value.

As of early 2020, there are 1.5 million bitcoins left in inventory out of the 16.6 million bitcoins mined. Most of them were mined in 2009 and 2010.

On March 13, 2011, Bitcoin inventory peaked at 2,593,051. The price of Bitcoin has been rising rapidly from 2009 to 2010 because it was easy to mine Bitcoin and there was not much to do with Bitcoin at the time. But as adoption and interest grew, so did the demand for Bitcoin.

These miners then sell these Bitcoins to new buyers, and in the process they have to transfer these Bitcoins through the blockchain, which means that these Bitcoins have now been spent. Bitcoin inventory has fallen by more than 1 million since its peak 9 years ago. Since the peak of Bitcoin inventory in 2011, 12.5 million Bitcoins have been mined, and 13.5 million new Bitcoins have been added to the network since then.

The impact of MRI (Miner's Rolling Inventory) value on price

The MRI index and price are closely related, and many people think that when the MRI index is large, the price will fall, and conversely, when the MRI index is small, the price will rise. This seems logical, but in fact, the opposite is true. In fact, when the price falls, miners will feel that the price is too low and will not sell. Naturally, it will not lead to a market crash. When the price rebounded from 3800 to 7000 recently, miners felt that the price would rebound to a high point in the short term and chose to sell the coins in their hands. This is why the MRI index has been greater than 100 after the recent sharp drop and rebound.

Why miners choose to sell a large amount of inventory on hand (what caused the MRI to be too high continuously)

After the price fell sharply, the mining cost was higher than the income, and the coins were sold into legal currency to recover the cost

The sharp drop in US stocks led to the decline of Bitcoin. After a brief rebound, the Dow Jones Index turned around and continued to fall on Friday

The number of people infected with the new crown pneumonia in the United States has increased significantly. The US economy will regress in the future. People choose to sell gold and Bitcoin to choose to hold cash

The market is bearish on the future Bitcoin market and chooses to sell in advance when it rebounds. Most people believe that the reward halving will not bring about an increase, and even the halving market has been consumed in advance

In the Bitcoin trading market, miners are usually very smart and sensitive to prices. To maximize their interests, they usually predict the price trend in advance to a certain extent and make corresponding selling behaviors. The recent MRI index fully demonstrates the pessimistic attitude of miners towards future price trends. With the general decline of the US stock market and the continued increase in the number of COVID-19 infections in the United States, it indicates that the future will be worse. The Bitcoin halving market has been consumed in advance, and there is no evidence that it will rise sharply in the future. William Coin Circle reminds everyone to be cautious in bottom-fishing.