Bitcoin’s price is sitting well below its record highs and some miners are selling more coins than usual. But should investors be concerned?
And it’s true: miners are selling, but that’s no reason to panic.
This article explains some of the nuances behind historical miner selling habits, examines some recent announcements of bitcoin sales by miners and reviews why miners selling their coins is a natural and healthy market dynamic.
Consider what the bitcoin economy would be like if miners never sold, which seems to be a scenario many bitcoin investors would like. There would be no bitcoin economy. No one except miners would own any bitcoin, and no one could access bitcoin except through mining — and even after mining, the coins couldn’t be spent on anything.
With a lower price and marginally worse mining economics, everyone panics when a headline says miners have sold some coins. But bitcoin miners are the ultimate bulls who consistently sit in one of the most heavily-leveraged, long-bitcoin trades in the market. Some selling by miners is necessary, healthy and absolutely no reason to panic.
This is a guest post by Zack Voell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.