Your favorite crypto news blog

Bitcoin Miners Accumulating Coins in Prospect of a Rapid Upturn

Mining 2020/04/16 13:36 by Edwin Kinoti
Bitcoin Miners Accumulating Coins in Prospect of a Rapid Upturn

Bitcoin miners are controlling the supply of Bitcoin in the lead up to the halving event set to occur within a month’s time. The miners appear to be storing a substantial amount of their rewards rather than directly sell into the market in anticipation of an upturn in the market.

Miners artificially reducing Bitcoin inflation

The halving event that is slated to occur around May 17 is set to automatically slash the block reward by half. This means that miners will only generate 6.25 bitcoins for each mined block from the current 12.5. This occurrence is hardcoded into the Bitcoin blockchain meaning it will automatically lower the supply of new coins by 50% moving forward.

However, bitcoin miners appear to be ahead of the curve and are now choosing to artificially lower the supply of new coins entering the market. Data gathered by blockchain analysis firm Chainalysis and tweeted by crypto trader Theta Seek shows that Bitcoin miners have been accumulating coins for the past 6 months.

The trader also opined that they expect the miners to continue accumulating the coins even after the halving event. According to the trade, if the demand remains constant or rises then the digital asset could easily reach a new All-Time High (ATH) price.

Bitcoin miners similar to OPEC oil cartel

Theta Seek’s tweet aroused queries about the connection between miners accumulating coins and the bullish case for Bitcoin. Particularly, there is great concern about bitcoin’s recent trend where prices have stagnated thus raising doubts about miners actions’ ability to spur any substantial price increase.

The bitcoin trader explained the reasoning behind their assertion that miners accumulating coins would culminate in a price surge. Accordingly, miners act like the OPEC cartel that controls the global oil supply thus effectively influencing prices. By artificially limiting the total oil supply, they create a scarcity of the commodity thus pushing prices up.

The same case, therefore, applies for Bitcoin when miners artificially limit supply by hoarding the newly minted coins rather than send them directly to the markets. By so doing, the miners are able to control supply even in the absence of the halving event. Such a move will definitely decrease Bitcoin’s inflation rate and consequently result in higher prices.

The miners will then be able to sell their coins at a higher price to cover their current mining costs and make a profit. On the other hand, bitcoin investors and HODLers benefit from the resulting price surge.

0 Like(s)

You should also read...

Mining 01/04/20 11:21 by Brenda Ngari
Upcoming Bitcoin SV And Bitcoin Cash Halvings Will Spark Mass Miners Exodus To The BTC Network
The current global economic conditions are not favorable, even for cryptocurrency miners. As per Coin Metrics, a significant number of bitcoin (BTC) miners have capitulated as a result of the excruci...
Read More
Bitcoin 26/04/20 20:57 by Jeff Fawkes
On-Chain Metrics Reveal Bitcoin Investors Are Buying The Dip In Anticipation For Halving Effect
The Glassnode analyst Matthias Bachmann claims that on-chain metrics show investors’ positive expectations. The third upcoming Bitcoin halving has attracted massive attention, with concerns abo...
Read More
Mining 06/06/20 15:33 by Brenda Ngari
Struggling Miners Have Little Bitcoin Left To Sell And Its Bullish, Says Top Investor
Nearly one month ago, bitcoin underwent block reward halving. Yet, nothing much has changed since then as the price is yet to stage a full-scale bull run. In fact, bitcoin has been trading sideways e...
Read More
Bitcoin 18/07/20 08:52 by Brenda Ngari
3 Key Reasons This Renowned Finance Strategist Is More Bullish Than Ever About Bitcoin
Bitcoin faces numerous tailwinds despite extending its consolidation cycle. The king of cryptocurrencies has been trading in a very tight range in recent months after recovering from the mid-March...
Read More
Mining 02/03/21 02:00 by Tony Spilotro
Bullish Bitcoin Miners Cease Selling For The First Time Since 2020
Data shows that Bitcoin miners have ceased taking profit and have started to once again hoard BTC for the first time since mid-to-late December 2020. What’s notable about this, is the fact that ...
Read More