According to data from Coinbase, Bitcoin miners started hoarding the digital currency instead of taking profit for the first time since Dec. 2020. And this can mean a lot to the price of Bitcoin and other digital currencies in the future.
In the last year, Bitcoin soared 400% to reach an all-time high of $58,332. At that time, Bitcoin miners were ceasing profits from selling the cryptocurrency amid the bullish rally. However, the cryptocurrency plummeted back to $45,000 in late February in a severe correction, and Bitcoin miners had to adopt a new strategy.
Bitcoin miners mine the digital currency online using strong GPUs while the computer solves complicated equations that eventually lead to the creation of the blockchain; the system responsible for cryptocurrencies trading and exchange. That being said, when Bitcoin miners halt the selling operations, the cryptocurrency market suffers a shortage in digital currencies.
In recent months, Bitcoin miners and whales were the biggest responsible for the digital currencies corrections because of selling cryptocurrencies amid the Bitcoin rally. Consequently, Bitcoin miners were ceasing profit from mining but negatively impacting the crypto market with provoking corrections every time.
Nevertheless, following Bitcoin’s severe correction in late February, Glassnode reported that Bitcoin miners are holding their digital tokens instead of taking profit. This in return will leave exchanges with no digital coins coming in from miners. Consequently, traders and institutional investors will have nothing to buy; leading Bitcoin to thrive again.
China’s Largest Crypto Miners Shut Down Operations
China’s Inner Mongolia region is planning to ban new digital currencies mining. Inner Mongolia will be restricting any crypto mining activity to lower energy consumption in the region.
According to Reuters, the autonomous region of northern China saw a 9.5% energy intensity increase, while the energy consumption rose by 65.62 million tonnes. The leading cause behind the energy consumption increase is Bitcoin mining as it consumes an estimated 128.84 terawatt-hour; more than Ukraine and Argentine consumption.
China is currently the largest Bitcoin mining ground in the world with 65% of all Bitcoin mining globally. Meanwhile, Inner Mongolia makes 8% of the total Bitcoin mining in the country. On the other hand, the United States stands with 7.2% of the total Bitcoin mining globally. Inner Mongolia is planning to shut down all active crypto mining projects by April 2021.
In conclusion, several financial institutions are bullish about Bitcoin. For instance, Citi said that Bitcoin could replace the mainstream financial system, or else it will dissapear.