Bitcoin

Halving Bitcoin will no longer make miners the biggest sellers of BTC

After Halving Bitcoin (BTC) on May 12th Traders generally expect the price of the best positioned cryptocurrency to fall by market cap. According to a leading on-chain analyst, selling pressure can come from exchanging cryptocurrencies.

Willy Woo, co-founder of Hypersheet, said that The exchanges will likely start selling their crypto asset stocks, which are made up of trading fees. Exchanges usually receive trading fees in the form of cryptocurrencies and sell them to cover operating costs.

Considering that the cryptocurrency exchange market generates 1,200 BTC from fees daily, which is equivalent to $ 11.6 million, this can slow Bitcoin’s upward trend.

Selling pressures from crypto exchanges can ruin Bitcoin recovery

Halving Bitcoin will no longer make miners the biggest sellers of BTC
Halving Bitcoin will no longer make miners the biggest sellers of BTC

After halving Bitcoin, miners will generate half of the BTC they have done in the past four years.

Historical earnings from Bitcoin miners. Source: Blockchain

Bitcoin miners historical income. Source: Blockchain

According to rough estimates, miners’ revenues will decrease from 1,800 BTC to 900 BTC every day. released from Woo.

If miners’ incomes are halved, the mining sector will earn about 33% less BTC than the cryptocurrency exchange market. The risk of a sell-out after halving therefore comes from exchanges rather than from miners.

Woo explained:

After 2020, miners will no longer be the largest sellers of Bitcoin. It will be the start of cryptocurrency exchange as a leading seller. The biggest selling pressure on Bitcoin will soon come from the exchanges selling their BTC fees calculated on Fiat.

Bitcoin exchange volume continues to grow as mining revenue falls. Source: Skew

Bitcoin’s trading volume continues to rise as mining revenues decrease. Source: Skew

He emphasized that the term “selling pressure” is often misused in the cryptocurrency market. When individual traders sell or buy Bitcoin on the exchange market, the orders are coordinated. It is difficult to categorize transactions such as buying or selling volume.

Instead, he found that there are two main sources of revenue that affect the market: miners and exchanges.

The analyst said:

There are only two unmatched selling pressures on the market. (1) Miners who water down the offer and sell it on the market is the hidden tax from monetary inflation. And (2) exchanges that tax traders and sell on the market.

However, some argue that due to the pressure to convert exchange rates into cash, the market is likely to include the price.

A well-known dealer says he will not bring new sales pressure to the market

The well-known Bitcoin investor “I am Nomad” stated that all major cryptocurrency exchanges already sell a large percentage of their fees in cash through the market or with a long-term strategy.

The market may be factoring in the conversion of fees into cash, reducing the likelihood that this will lead to market stress.

The investor he said::

All major exchanges sell a large percentage of the fees in cash (through their own market or through a long-term tranche). I know this because I was on the buy side of this agreement. This does not create new sales pressure that people should be afraid of. It’s the same as always.

If cryptocurrency exchanges regularly convert their fees into cash, it is unlikely that Bitcoin’s price performance will be put under severe pressure after halving.

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