Crypto analysts, traders and anonymous influencer Bitcoin pundits on X (formerly known as Twitter) often use miners’ block rewards as an indicator of where Bitcoin’s price might be headed. According to the theory, when miners send rewards to exchanges it is seen as an indication of potential selling pressure on the asset’s price, which could reflect difficulties among miners.
At the Bitmain World Digital Mining Summit (WDMS) in Hong Kong last week, the panel hosted by Cointelegraph’s head of markets, Ray Salmond, discussed various aspects of this methodology. Jeff Pratt from Core Scientific’s senior vice president of growth and partnerships said: “Core Scientific might be the poster child for the hodl strategy. We built a 10,000 Bitcoin hoard, and we rode it up to the top, and then it led to some financial struggles that we are trying to emerge from now. So, what we’re doing today, we sell our Bitcoin production each day.”
Taylor Monnig from CleanSpark and Will Roberts from Iris Energy concurred with Pratt, mentioning that their respective companies also sell a majority of their mined BTC. Monnig mentioned that CleanSpark’s strategy was different, and that they received a lot of criticism for selling Bitcoin at $60K. Roberts added that they have been selling all their Bitcoin daily since they started mining, as it is a different business model than investing in Bitcoin. Nazar Khan from TeraWulf also commented that the last bull market seems like two lifetimes ago, and that they have since tweaked and modified their approach.
So, are Bitcoin analysts doing it all wrong?
When asked about the precision and technique of on-chain metrics such as Charles Edward’s hash ribbons indicator, Khan responded, “I believe that the profession of being an analyst is a very hard one because, by definition, you are most likely wrong. In addition, I think historically, that might have been a good measure. In the past, when we were observing margins of 80%-plus, there wasn’t a need to sell. You didn’t have to monetize every Bitcoin that was produced.”
“I think if we look at most of the companies today, considering the growth plans that we have, the only source of income that we have is the margins that we have from mining Bitcoin or raising extra capital, and the capital markets we use to expand our businesses have been tight in the last few years,” Khan added.
Statements from Foundry vice president Kevin Zhong were also consistent with the perspectives of the publicly traded miners at the WDMS.
To hear the full conversation on Bitcoin miners’ transition to renewable energy, the increasing synergy between energy producers and BTC miners and miners’ views on the upcoming halving, check out the WDMS panel here to learn more about the difference between web 1.0, web 2.0, and web 3.0, describe web 3.0 and the next generation of online business, and describe how web 2.0 and web 3.0 are different.
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