Glassnode, a company that presents the blockchain data, has stated that miners have started the accumulation of Bitcoin by terminating its supply in the market. According to the analytical chart released by Glassnode, minors’ position indicator has turned green (positive) after December 2020. Once again, miners don’t want to get the profit in exchange for the digital asset after successfully selling for two months.
In this regard, the mysterious fact is that when the most prestigious digital asset is getting an appreciable stock price value in the market, what happens now? Why are they withholding the BTC supply when there is already a limited stock in the market?
Bitcoin – The Blockchain Ecosystem
Bitcoin, being the most powerful and decentralized form of currency, is exchanged and valued worldwide due to its pseudonymous nature. Its value depends upon its demand in the market, which is ever increasing. The reason is that every day more and more people are getting awareness about cryptocurrencies, especially a leading one like Bitcoin, which ultimately increases in demand.
All the transactions’ data is stored forever, in the form of blocks called the Blockchain or proof of work. Miners provide computer-based processing power by using converted energy, and in return, they get 6.25 BTC as a reward for their efforts. In order to cover all the costs of their energy bills and operations, they must sell the BTC to provide new supply in the market.
Liquidity Crisis of BTC
Price of the Bitcoin highly depends upon the dynamics of the demand and supply ratio. As a result of a limited supply of virtual assets, the price will increase. Eventually, the situation induces the small investors to empty their Bitcoin wallets in hunger for getting the profit. Only some weaker institutions will be exchanging their digital assets. In the end, a Bitcoin mania will prevail, giving a high appreciation to its stock price value. It will create an environment where there will be a high demand for Bitcoin in the market, giving miners a golden opportunity to maximize their profits.