While the crypto market is on the verge of crypto winter, major cryptocurrencies are rolling down exponentially. Amid this crypto storm, Coinbase research report stated that newly minted bitcoin selling by miners is not likely to create any sort of market pressure.
In the report, Coinbase addressed the common concern during the depleting bitcoin mining ratio and hashrate.
The downward momentum in crypto and crash in the bitcoin market price shrank the margin across all platforms. Less margin compelled miners to sell their bitcoins.
An unfortunate drop in the market price and heavy loss of profitability has shifted crypto markets materially since last year. This has made it an uphill task for miners to raise capital in the public markets.
Although, if miners sold out each newly issued bitcoin instantly then it would equate to only 900 BTC of selling pressure. This figure holds 1% to 1.5% of total daily volume. The report quoted that a healthier bitcoin derivative market should provide more options for their potential hedging strategies.
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Top-notch bitcoin mining industries which have grown exponentially in the last few years are now forced to redesign their operations. The blog post stated that this situation “should present opportunities for consolidation across the mining industry in the second half of the year as less prudent miners continue to face challenges.”
Furthermore, the report stated that miner selling and shuttering activities in recent months have reduced network hashrate and ultimately declined the mining difficulty.
The bottoming process will begin when this trend flattens. An analogous pattern was seen during the 2018 crypto winter as well.
