Miners Keep Loyal to Bitcoin (BTC) with High Activity
After another anomalous loss of hashrate, miners once again report near-peak hashing levels.
Bitcoin (BTC) mining is showing strong signs of recovery, assuaging the fears that miners are capitulating. After a recent dip to 74 EH/s, mining is once again at 101 EH/s.
BTC mining is still done by a limited number of leading pools, competing for the last rewards before the halving. Miners have 167 days to receive rewards of 1,800 BTC per day, with most of the coins going to the biggest pools.
At the same time, those 1,800 BTC are only a fraction of current trades. Research has hinted that miners capitulating may not break down BTC prices as much as expected.
At one point, miners selling coincided with one of the worse days for BTC price moves. However, overall, miners are a steady and small pressure on the markets. Additionally, futures markets add new mechanisms of speculation, and large-scale exchanges are much more influential. Miners also have the chance to sell their coin on OTC platforms, and to specific users demanding new coins.
Miners also signalize a rock-bottom price for BTC, as profitability is still important. At this point, it is uncertain what portion of BTC is kept or sold, and if miners are in for immediate profits, or some hope for a higher price in the future.
Miners also make the decision to put new coins on the market, a recent blog posting suggests.
“Every time a coinbase becomes spendable (100 blocks after it's appended to the blockchain), its miner makes a decision, conscious or not, whether to move its reward or to keep it still.
Hence, miners's collective "hive mind" control a tap that increases / decreases the available supply of new bitcoin in the market,” analyst Felipe Gaúcho Pereira commented.
Also, analysis did not reveal a link between miner flows to exchanges and significant effects on BTC prices.
Highly active mining also gives confidence in BTC safety. More miners, which also provide nodes, means a lesser chance of censorship for the network. However, mining in its current state may also become more challenging as block rewards diminish over the years. Miner fees for transactions are still relatively small in comparison to block rewards, and in the future, it is uncertain if miners would have an inventive to continue, unless BTC prices rise more significantly.