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Bitcoin halving may have other ...

Bitcoin halving could have other consequences, says Binance CEO
CONTENT

  • Miners can start playing against the market.

  • If things don’t improve over the medium term, Bitcoin over-holding could hurt the market.

  • Exchanges have all the chances to seize the leverage on the bitcoin price from miners.

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Bitcoin miners can start storing the mined cryptocurrency to their own detriment, just not to sell the asset at an unfavorable rate, the head of Binance believes.

Bitcoin halving may have other ...

The head of the Binance cryptocurrency exchange Changpeng Zhao believes that the consequences of the Bitcoin halving may take a completely different turn than many thought. The co-founder of Binance said this during the Consensus conference, quoted by Bloomberg..

Zhao believes that halving Bitcoin halving cuts the number of new coins created and earned by miners in half. This happens about every four years and … More can affect the price of bitcoin in very different ways than it was at first glance..

The cryptocurrency community actively featured two scenarios for the development of post-halving events: either the price rises sharply due to speculation, or cryptocurrency miners arrange another dump, selling bitcoin in large volumes to cover the profitability of mining with an unfavorable bitcoin rate.

Against the market

Now, Zhao believes that miners can take the third path and hold the mined assets for much longer than selling at prices below their breakeven costs..

“There is a psychological effect that also pushes the price up, but in general I believe that although the supply is limited, the demand is growing exponentially,” Zhao said..

Bitcoin halving may have other ...

Recall that starting from May 11, Bitcoin miners began to receive instead of 12.5 BTC for the mined block, only 6.25 BTC due to the past halving, which reduced the block reward.

The integrity of the miners can be costly for the cryptocurrency community. If bitcoin fails to recover in price in the medium term, bitcoins overexposed by miners can be poured into the open market on a huge scale, arranging another cryptocurrency winter.

Change of leadership

However, there is still a possibility that crypto-exchanges, and not miners, will become the main vector of the industry’s movement. Trading platforms constantly receive cryptocurrency regardless of halving due to the fees charged.

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If bitcoin fails to recover in price in the long term, then there will be a possibility of a gradual pushing down of the price, as mentioned by the creator of Silk Road Ross Ulbricht.

So far, cryptocurrency exchanges, according to Zhao, are doing better than ever.

“Over the past few months, we have seen a significant increase in activity both in trade volume and, as a consequence, in income,” Zhao said.. 

Although the coronavirus outbreak has affected large swathes of the global economy, the crypto exchange was still somewhat isolated. Investors can still trade from home. This has allowed Binance to continue to release products and the company plans to expand its workforce, Zhao noted..

Bitcoin halving may have other ...

What do you think? Will miners deliberately hold on to Bitcoin so as not to sell at an unfavorable rate? Share your thoughts with us in the comments.

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