Bitcoin is down and analysts are explaining the reasons behind the bitcoin crashing. Some are even blaming the miners for the dumping. But recent research shows that miners have very little role in controlling the value of digital gold.
Relation between price and miners
Though there are so many reasons for the recent bearish trend, the two main factors are said to be contributing are China’s policy towards cryptocurrency and the second one is focusing on the miners’ role in the slumping. However, BTC recovered almost 14% from its lowest price of the month but the total down-value of the whole month is 20%.
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As the crypto markets of Bitcoin is moving down from the last 5 months and price has degraded to a very deep position. This movement is supposed to link with the capitulation done by miners and it is said that smaller ones who are mining left the field in case of value dropping because they cannot meet the expenses for the mining process. The ‘miner capitulation’ happened in 2018 when the price value went down- even below $3,200.
What research says
The research done by Paradigma Capital on the relationship between BTC miners and price reveals the fact that miners have a very tiny proportion in commanding the value by selling pressure. The research adds the information that it is a wrong supposition that people who mine usually sell the BTC when the value seems to go down and retain when they believe the trend line is going up.
The rate at which fresh new coins are released into the market is a function of the intertemporal arbitrage miners practice.
However, it is true that miners are controlling the entrance of freshly BTC into the crypto markets but it does not mean at all that they have signed a role in price control.
Miners outflow to Exchanges
Miner outflow to exchanges is also misinterpreted to be a major factor in commanding BTC’s price value. According to the research report:
We didn’t identify meaningful bivariate relationships between miner outflows to exchanges and BTC prices. This doesn’t mean we’ve falsified the hypothesis that they exist (nor that miners have some degree of influence over prices),
Do you believe that miners are controlling the BTC price value? Share your view in the comment box.