After the Bitcoin (BTC) halving on May 12, traders generally expect the price of the best positioned crypto currency by market capitalization to fall. According to a leading on-chain analyst, selling pressure may come from cryptomoney exchanges.
Willy Woo, co-founder of Hypersheet, said the exchanges will probably start selling their stocks of crypto assets composed of commercial fees. Typically, exchanges receive commercial fees in the form of cryptomonies and sell them to cover operating costs.
Given that the market for cryptomone exchanges generates 1,200 terpin first accused – publicly listed mining companies, – short-term bullish reversal – report: bitfury weighs initial public offering – a grassroots entrepreneur a day from fees, equivalent to USD 11.6 million, it may slow the upward trend of Bitcoin.
Experts make predictions about Bitcoin’s price as the halving
Sales pressure coming from cryptomoney exchanges can ruin Bitcoin recovery
After Bitcoin’s halving, the miners will generate half the BTC they used to in the last four years.
On a daily basis, the miners‘ earnings will decrease from 1,800 BTC to 900 BTC, according to rough estimates published by Woo.
When miners‘ revenues are halved, the mining sector will earn approximately 33% less BTC than the crypto exchange market. As such, the risk of a massive post-halving sale comes from the exchanges rather than from the miners.
Woo explained:
After this 2020, the miners will no longer be the biggest sellers of Bitcoin. It will be the dawn of the cryptomone exchanges as the leading sellers. The biggest selling pressure on Bitcoin will soon be from the exchanges that sell their BTC fees charged in fiat.
Catastrophic disruption or healthy rebalancing? How halving will affect miners
Bitcoin exchange volume continues to increase while mining revenue falls. Source: Skew
Bitcoin exchange volume continues to increase while mining revenues fall. Source: Skew
He stressed that the term „selling pressure“ is often used incorrectly in the crypt coin market. When individual traders sell or buy Bitcoin in the foreign exchange market, orders are matched against each other. It is difficult to categorize trades such as buying or selling volumes.
Instead, he noted that there are two main sources of sales that affect the market: miners and exchanges.
The analyst said:
There are only two unparalleled selling pressures in the market. (1) Miners who dilute supply and sell in the market, this is the hidden tax through monetary inflation. And (2) Exchanges that tax traders and sell in the market.
But, some argue that the market is likely to be including the price because of the pressure of converting exchange fees to cash.
