Public mining companies sold almost all of the bitcoins mined in 2022, putting pressure on the price of the cryptocurrency. This was noticed by Messari Senior Analyst Tom Dunleavy.
BTC miners sell roughly 100% of the coins they mine
The 10 public bitcoin miners
detailed here mined ~40.7k BTC and sold ~40.3k in 2022
This is a persistent headwind for BTC and for no other reason a good thesis to be bullish the ETHBTC ratio trade pic.twitter.com/L1iI6Z07p7
— Tom Dunleavy (@dunleavy89) December 26, 2022
According to him, 10 exchange-traded firms have mined ~40,700 BTC since the beginning of the year and sold ~40,300 BTC.
“This is a constant headwind for bitcoin. For no reason, this is not a good thesis for a bullish sentiment towards the ETH / BTC pair, ”the expert said.
In May, public mining companies for the first time sold about 100% of the mined first cryptocurrency, and in June they began liquidating accumulated reserves. The trend continued in July, showing a rollback in August-September.
Of the leading miners, only Marathon Digital and Hut 8 have confirmed their commitment to the digital gold accumulation strategy. Users drew attention to the preservation of large positions in bitcoin Riot Blockchain and HIVE.
Most commentators disagreed with Dunleavy’s conclusions. They pointed to the insignificance of sales by miners compared to the daily volume of cryptocurrency trading.
“Bitcoin miners have an annual income of $10 billion. Daily trading volume is $2.4 billion in a bull market. Are you serious?” wrote Compass Mining PR director William Foxley.
there’s $10 billion in revenue for Bitcoin miners per year
Bitcoin daily trading volume is $2.4 billion during a bera.
this your take fr?
— Will Foxley 🧭 (@wsfoxley) December 27, 2022
Dunleavy was also reminded of a recent study by Jaran Mellerud from the Hashrate Index. According to the expert, even the elimination of 300% of daily production by miners does not exceed 0.63% of the volume of the bitcoin spot market.
Abysmal small amount (< 0.3%) compared to daily spot trading volume. pic.twitter.com/wcohr31oFF
— 🐱 Ji @ crypto-cafe (YT)🐱 (@0xCryptoCafe) December 27, 2022
BlockTower Capital founder Ari Paul, on the contrary, supported Dunleavy.
“And yet even $1 billion in selling pressure typically results in Bitcoin losing more than $30 billion in market value. Don’t be fooled by liquidity figures. This is very deceptive in terms of market impact,” he said.
And yet $1b of sell pressure routinely makes BTC lose $30b+ in market cap…don’t be fooled by the liquidity numbers. Very misleading in terms of market impact. Most of that liquidity vanishes at first hint of trend.
— Ari Paul ⛓️ (@AriDavidPaul) December 27, 2022
Users also noticed that Dunleavy directly pointed out the possible advantages of Ethereum over the first cryptocurrency. The expert was probably referring to the network’s transition to the Proof-of-Stake (PoS) consensus algorithm as a result of The Merge update in September.
Bitcoin has since fallen from $20,256 to $16,677, about 17.6%. ETH quotes fell from $1635 to $1196 or ~27% (CoinGecko).
“The capitulation of miners is a short-term phenomenon. 2022 does not make it possible to predict and predict that it will be constant. In addition, sales distribute BTC among the community in a better way than PoS, in which coins are concentrated by the best holders / validators, ”said ex-trader Dan Ripoll.
Miner capitulation is a short term phenomenon. You can’t project 2022 forward and assume this will happen continuously. Plus, the selling distributes BTC more broadly among the community vs PoS which concentrates coins among the top holders/validators.
— Dan Ripoll (@danieleripoll) December 27, 2022
Recall that in November, hashprice updated its historical lows at around $0.056 per 1 TH/s, while mining difficulty, on the contrary, reached a record high of 36.95 T. Against this background, the total income of bitcoin miners fell by 20% compared to the previous month, to $473.2 million, follows from the Cryplogger analytical report.
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