The current behavior of the Bitcoin miners is to accumulate their crypt coins in order to speculate with the existing high demand.
According to data from the analysis firm Glassnode, the Bitcoin miners are more determined to hoard than to sell their coins. This fact contrasts dramatically with the previous increases. When the price of BTC rose exponentially, the miners proceeded to liquidate their crypt coins at the exchanges.
As we know, the miners are among the main determinants of the price of the leading cryptomoney. That is, when the miners sell their Bitcoin Trader in large quantities, the price drops. The same thing happens in the opposite direction, when the miners hoard their coins, the value of the currency tends to rise.
Last year, 2019, when the price of Bitcoin reached $14,000, the miners‘ sales were massive. The same is true for the, until recently, biggest upward run of the currency in 2017, when BTC reached very close to $20,000 per unit. At that time, the mass sale caused the collapse of the value.
Will miners make Bitcoin take off for the moon?
Miners Show More Interest in Saving Their Bitcoin Possessions
The fact that the Bitcoin miners are now showing more interest in preserving their currencies keeps the upward flame burning. Now the pattern of Bitcoin sales by the digital farmers, although higher in quantity, in proportion is still much lower than the sales of other raises.
Here the classic law of supply and demand comes into play in a „chemically pure“ way. If the miners do not sell more than is necessary for their operating expenses (purchase of equipment, electricity, maintenance, rentals, among others), a supply constraint is created that promotes price increases.
In previous years, this also often happened, but the absence of large investors increased the volatility. In that sense, the miners, in order to take advantage of the fleeting rises, proceeded to liquidate their Bitcoins before the price dropped, which made the price drop an almost natural phenomenon.
The big difference now is that the scarcity of currencies is combined with the voracious demand for them by large investors. Among them, institutional investors, who buy Bitcoin per minute in large quantities. Thus, the growing demand for Bitcoin creates the psychological feeling of savings among miners.
The graphs show that when the price of Bitcoin approaches its historical highs, it causes massive sales by the miners. Source: GlassnodeThe graphs show that when the price of Bitcoin approaches its historical highs, it triggers massive sales by miners.
MicroStrategy could liquidate your Bitcoin holdings overnight
Demand does not show signs of relaxing
What’s important in this case, where the Bitcoin miners are particularly thrifty, is that the coin claimants won’t let up on the pressure. Recently, MicroStrategy announced a new million dollar coin purchase without waiting for the price to drop, which indicates that demand, far from decreasing, will increase in 2021. This makes speculation one of the miners‘ favorite fashions for taking advantage of high currency prices in the future.
During 2020, institutional investors, paid large sums to buy Bitcoin. Initially, this came about as a defense mechanism against the dangers of an unprecedented devaluation in the price of the US dollar.
However, now with the outrageous profits by MicroStrategy and other firms, the demand for Bitcoin has become more attractive.
Facts to Consider
Increasing demand for crypto-currency has made Bitcoin miners inclined towards speculation.
While there is less supply of bitcoins in the market, contrasted with a growing demand, the price of the currency remains high.
In the past, when the price of Bitcoin went up, miners made mass sales to take advantage of the gains before it went down.
Bitcoin’s maturity in 2020, along with the great results for companies and investors, has created a prolonged upward trend.