Bitcoin (BTC) miners were selling their reserves ahead of the halving and the spot exchange-traded funds (ETFs) in the United States may have “spread out the potential selling pressure” which helped avoid a sharp price drop alongside the event, says Bitfinex.

“It appears that miners have executed their selling in advance, which has turned out to be advantageous for the market in the short term,” the crypto exchange wrote in its April 22 weekly market report.

It cited CryptoQuant data showing that in March a daily average of 374 BTC was sent by miners to exchanges — an over 70% fall from February’s 1,300 BTC daily average, equivalent to $86.4 million.

“We assume miners were already selling their BTC holdings or collateralizing them to upgrade their machinery and infrastructure,” Bitfinex wrote.

Cointelegraph Markets Pro shows Bitcoin rising around 4.5% to $66,597 since the April 20 halving, continuing an upswing that started on April 17 after it hit a more than 40-day low of under $60,000.

Miners usually see their revenues decrease after halvings, the report explained — this time their rewards were cut to 3.125 BTC per block mined, roughly $208,000 at current prices.

In past halvings, miners have exerted “significant selling pressure” aiming to maximize earnings before their revenue stream is essentially slashed by 50% — which in turn potentially leads to short-term “increased volatility and price declines,” Bitfinex added.

But, rising prices and expanding mining operations typically follow to “compensate for the reduced rewards” and the negative market effects “are often temporary, as market dynamics adjust.” it wrote.

Bitcoin ETFs help dampen halving impact

Institutional demand for the new United States spot Bitcoin ETFs may have also lessened a potential price stumble caused by Bitcoin’s new reward schedule, Bitfinex adds.

The ETFs’ “large-scale” flows — reaching $192 million in Bitcoin investment product outflows last week — can “significantly sway market sentiment and pricing” and are often detached from “the usual supply-demand framework,” it added.

“The added dynamic of the halving-induced ‘supply shock,' the combination of ETF demand and constrained supply could drive further price appreciation for BTC.”

The crypto exchange noted that ETF flows have slowed since their January launch and sometimes have seen net outflows — but still had “strong interest.”

Related: Bitcoin ‘no longer cheap’ — Fidelity revises medium-term outlook for BTC

The amount of Bitcoin the ETF issuers purchased for their funds has also outpaced new BTC creation since launch, which Bitfinex expects will significantly tighten.

Bitfinex estimated based on issuance trends that as low as $30 million worth of Bitcoin could be supplied to the market per day post-halving while the average daily net inflows to ETFs “dwarf that number at over $150 million,” it wrote.

The ETFs’ total demand has outstripped supply by over 150,000 BTC so far, Bitfinex wrote. “We expect this trend to continue in the coming months.”

Big Questions: How can Bitcoin payments stage a comeback?