In a recent twitter thread, Willy Woo postulates that post-halving, miners will cease to be the largest sellers of Bitcoin.
Crypto exchanges will lead in selling BTC collected as fees to convert into fiat.
This is similar to how miners dump Bitcoin for fiat.
Crypto exchanges offering futures trading have changed the selling dynamics of BTC.
It is a long-held fact that Bitcoin miners are the largest sellers of BTC to convert their holdings into usable fiat that usually facilitates in paying operation costs for their mining activities. However, veteran Bitcoin analyst, Willy Woo, believes that they will cease to be the leading sellers of BTC. That mantle will now be occupied by crypto exchanges selling the BTC attained from fees in exchange for fiat.
Mr. Woo further explained that this will occur post-halving as miners’ rewards are halved.
Post this 2020 halvening miners will cease to be the biggest sellers of Bitcoin. It’ll be the dawn of the crypto exchange as the leading seller.
The biggest sell pressure on Bitcoin will soon be from exchanges selling their BTC fees collected into fiat.
Trading Fees From BTC Futures Gets Dumped Onto the Markets for Fiat
According to Woo, crypto exchanges and miners are the largest forms of selling pressure in the markets. In the case of miners, their sale of mined BTC dilutes the supply whereas exchanges sell BTC fees collected from trading. Of particular interest, is the futures trading that generates a considerable amount of fees in BTC. Mr. Woo explained that the rise of crypto exchanges offering futures will result in more sideways movement for Bitcoin from the additional sell pressure.
With the rise of BitMEX and now strong competing futures exchanges all pushing billion dollar daily trade volumes, the picture looks like this:
1800 BTC/day from miners pre-halvening
900 BTC/day from miners post-halvening
1200 BTC/day from exchange fees…
When I look at the long term price chart of BTCUSD 2017-2020, the rise of the BitMEX style futures exchanges has made a irrevocable footprint on the price, we have much more sideways now from the additional sell pressure.
Long Term Spot Investors and HODLers are The Angels Moving the Asset Class Forward
In the conclusion of his analysis, Willy Woo determined that spot investors and holders were ‘the angels’ moving the crypto asset class forward. The entire Twitter thread by Mr. Woo, can be found here.
( Feature image courtesy of Oleksandr Baiev on Unsplash.)