Topic: What happens to the miners' reward coins? - page 2. (Read 316 times)
A usual practice for miners is to sell bitcoin futures contracts to hedge themselves against market volatility and lock in those Bitcoins' value. Regarding the fundamental value that should create pressure on the buy side of the market it is mostly speculative, but think like this: the supply is limited so Bitcoin is a deflationary currency. Second - there are 36 millions millionaires in the world and the maxSupply of BTC is 21 million. Then you have institutions like Bakkt setting up the infrastructure for trading Bitcoin. Banks like JP Morgan and Wells Fargo created their own cryptocurrencies - they see the potential in the blockchain tech. Bitcoin adoption is steadily raising - just heard that over 6000 tobacco shops in France will start accepting it. However at the moment buyers are mostly interested in buying BTC in order to win money by speculating on the price. Halving is approaching ( in May 2020) so there are plenty of reasons for buyers to continue purchasing BTC.
the private trades are called OTC trades (over the counter)
motives:
1. avoid causing coins to be put on exchanges to affect prices
a. imagine selling on an exchange a days worth of coins would impact the price.
with some pools having 15% of blocks (26 blocks of 12.5=325ccoins) so selling 325coins in one go is enough to change the price
b. they just dont have time to break it down and just be selling their single blockrewards of 12.5 coins every hour.
c. they have less control of the price if using public exchanges, no one can predict the public exchange price an hour ahead
2. able to control the price
a. by having pre-planned contracts for private buyers to buy at $xxxx pools can then know they can cover the electric
b. by knowing they can cover their bills they can then ensure they put the most electric into the most amount of asics
c. pools dont react to public prices. instead they have orders pre arranged and controlled.
d. this is why you dont see smart pools jumping up and down in hashrate every minute a public exchange price changes
3. buyer gets coins at a controlled rate/cost without all the volatility which they would themselves cause if done on public exchanges
4. institutions dont want coins with bad taint and have no clue even when buying on an exchange what taint they will end up with until they hit the withdrawal button. so they want to avoid taint, thus avoid public exchanges.
5. just like buying shares institutions dont want to go around buying little snippets of shares from small share holders. they dont have the time and dont want the hassle and of course they dont want to trigger the rumour mill if news starts going around that they want to buy alot of shares in one go. its better to only deal with big hoarders and do it in private so that the common man doesnt get emotional about news they would hear if it was done publicly
imagine it. most exchanges show orders of 0.001-3btc.. imagine the emotions flare if a public exchange put an order in for 300btc. just seeing a order that size on a public exchange order book becomes a 'wall' in which traders then fight against and switch directions
motives:
1. avoid causing coins to be put on exchanges to affect prices
a. imagine selling on an exchange a days worth of coins would impact the price.
with some pools having 15% of blocks (26 blocks of 12.5=325ccoins) so selling 325coins in one go is enough to change the price
b. they just dont have time to break it down and just be selling their single blockrewards of 12.5 coins every hour.
c. they have less control of the price if using public exchanges, no one can predict the public exchange price an hour ahead
2. able to control the price
a. by having pre-planned contracts for private buyers to buy at $xxxx pools can then know they can cover the electric
b. by knowing they can cover their bills they can then ensure they put the most electric into the most amount of asics
c. pools dont react to public prices. instead they have orders pre arranged and controlled.
d. this is why you dont see smart pools jumping up and down in hashrate every minute a public exchange price changes
3. buyer gets coins at a controlled rate/cost without all the volatility which they would themselves cause if done on public exchanges
4. institutions dont want coins with bad taint and have no clue even when buying on an exchange what taint they will end up with until they hit the withdrawal button. so they want to avoid taint, thus avoid public exchanges.
5. just like buying shares institutions dont want to go around buying little snippets of shares from small share holders. they dont have the time and dont want the hassle and of course they dont want to trigger the rumour mill if news starts going around that they want to buy alot of shares in one go. its better to only deal with big hoarders and do it in private so that the common man doesnt get emotional about news they would hear if it was done publicly
imagine it. most exchanges show orders of 0.001-3btc.. imagine the emotions flare if a public exchange put an order in for 300btc. just seeing a order that size on a public exchange order book becomes a 'wall' in which traders then fight against and switch directions
There are people buying from exchanges to purchase goods, or for small private investments, but I haven't seen any stats reporting the characteristics or motives of Bitcoin buyers. Does anyone have any links to current analysis reports?
There is an old survey around that topic, but I don't know how credible the data is[1].
[1] https://lendedu.com/blog/investing-in-bitcoin
Don't think we'll ever see stats for these sorta things, as you said, the block rewards we see from the miners are likely sold in a private deal and from the lack of statistics and volume, it's seeming more and more likely.
Pretty sure they do it privately to avoid dumping bitcoin prices and also helps give them some more privacy. Wonder what other reasons there might be.
Pretty sure they do it privately to avoid dumping bitcoin prices and also helps give them some more privacy. Wonder what other reasons there might be.
how can there be any "analysis report" when by nature these types of purchases are done privately. for example some investor who directly goes to miners and makes a deal/contract to receive "fresh" coins is doing it to increase their privacy and unless them willingly announce it to the world we can not know anything about it.
Miners have to cover operating costs, and one obvious way to do this is to sell some or all of the coins they receive for finding blocks. Without sufficient buyers, these sales would depress the price of Bitcoin, if they were sold through the exchanges. I know of at least one miner who sells his coins to an ATM operator, and that raises the question of who is buying through the ATMs. I suspect that other miners sell directly to large investors and exchanges, and these sales are kept out of the trading stats. There are people buying from exchanges to purchase goods, or for small private investments, but I haven't seen any stats reporting the characteristics or motives of Bitcoin buyers. Does anyone have any links to current analysis reports?
Jump to: