The chief investment officer of crypto investment firm Arcane Assets, Eric Wall, says that Chinese miners are most likely not the primary contributors to the recent bearish price action of Bitcoin.
In a tweet, Wall argues that the amount of Bitcoin that Chinese miners could have sold is just a fraction of the market’s daily volume and thus likely to have very little impact on BTC’s value.
“Q: did the miners selling approximately 2,500 BTC total over the past two weeks tank the market? (possibly to finance their relocation out of China)
A: Most likely no. [MicroStrategy CEO Michael] Saylor bought 5x as much, and he is just one guy.
On any bearish/bullish day, >100,000 BTC will change hands *per day*.”
The Arcane Assets CIO points out that only 900 Bitcoin are currently being produced per day, and even when miners have been hoarding, their stock is only roughly five times the daily global production of BTC.
“Miners mine 900 BTC/day and could only sell 4,000+/day for multiple days in a row if they’d been hoarding (not the case here).”
According to the crypto investment firm executive, the “measly” daily production of BTC is not a significant contributor to the selling pressure. Wall highlights that sentiment, and not mining behavior, is the key driver of Bitcoin’s price action.
“The market, the overwhelming market, is primarily driven by broad brush psychology. If you speak to enough traders and investors and are able to gauge their sentiment, their fears, their hopes, their stamina… you get a much better grip of what’s going on.”
In addition to market sentiment, Wall says that in the long haul, he expects the development of crypto’s infrastructure to influence the value of the leading cryptocurrency.
“There are, of course, other things that will move markets too on the long-time horizon… capital being passed down from baby boomers to millenials ($70 trillion next 3 decades). On-ramps being built. Better investment instruments. Improved user experience. Demographics changes. Improved regulations and tax treatment.”Check Price Action
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