Stop Blaming Miners for Everything

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The Big News – Miners Didn’t Crash the Price

When bitcoin’s price drops, miners are always a popular scapegoat. And the “miners are selling” narrative just won’t die off no matter how much contradictory data exists.

Last week, when the price dropped nearly 30% to just above $30,000, this idea resurfaced. It’s important to understand that miner selling habits have been extremely steady for months.

According to data from Glassnode, weekly transfers from mining wallets to exchanges have regularly stayed below 3,000 BTC since the May 2020 halving. And even if all these coins were instantly sold as soon as the transactions were confirmed, the total sell pressure would constitute low single-digit percentages of any leading exchange’s daily volume.

Notably, also according to Glassnode, the aggregate balances for addresses belonging to F2Pool, Lubian, and other large pools are actually steadily increasing, not decreasing. Miners are accumulating, not selling.

Miners are characteristically long-term bitcoin bulls. This means their incentives are to “hodl” and not to sell. And when the price goes up, miners can (and do) sell fewer coins, not more.

So everyone who might be frustrated that bitcoin’s price went down should do more homework before blaming miners. They’re just as bullish as anyone, and data shows they’re not selling any more coins than usual.


Iran Blames Blackouts on Bitcoin Miners

Iran continues to suffer from massive blackouts, but this time the government is blaming bitcoin miners. The Washington Post published a report of the current situation as Iranian state-run power companies and government officials point fingers at miners.

Earlier this month, Iranian officials reportedly disconnected hundreds of unregistered (thus, illegal) cryptocurrency miners from state-run power sources. But the blame for blackouts is shared equally by all miners.

Here’s the catch: bitcoin mining is said to constitute a “very small percentage” of overall power consumption in Iran. Ziya Sadr, a cryptocurrency researcher in Tehran, told the Washington Post, “The miners have nothing to do with the blackouts.”


Miners Are Doing Lots of Fundraising

Capitalizing on the bull market momentum and soaring profitability, mining companies are doing lots of fundraising lately.

Nasdaq-listed Marathon Patent Group aims to raise $250 million through a direct stock offering of 12.5 million shares. CEO Merrick Okamoto stated that the funds would be used to buy even more ASICs and expand the company’s mining facilities.

Bitfarms wrapped up a financing round. CoinDesk reported that the Quebec-based mining company raised $15 million through price placement of shares one week after closing another round of shares placement that raised the same amount. Presumably the money will also go towards buying more machines since miners still can’t get their hands on enough ASICs lately.

Coinbase also threw some cash at a new mining pool, Titan, which plans to end its beta testing phase in February. How much Coinbase Ventures invested wasn’t disclosed. Core Scientific is reportedly among the clients testing Titan’s pool.


Other Highlights

Bitcoin price stays around $36,000

  • As most altcoins are making massive moves to the upside, bitcoin stayed in a pretty tight price range. The leading cryptocurrency chopped around $36,000 for most of the weekend.

Babel Finance lets miners use ASICs as loan collateral.

  • The lending company now offers miners the option to collateralize loans with their mining machines instead of freshly minted cryptocurrency. The loan-to-value ratio (LTV) ratio for loans backed by ASICs is only 30%, a significantly cheaper rate than the normal 160%. (CoinDesk)

Poolin launches hashrate token on Ethereum.

  • The token, called pBTC35A, represents 1 TH/s of Poolin’s hash power and can be staked on Poolin’s recently launched Mars protocol. (The Block)

Bloomberg took photos of an Arctic Circle mining field.

  • If you want a glimpse of bitcoin mining in the Arctic Circle, a new photo essay from Bloomberg gives it. Showcasing miners in the Siberian city of Norilsk, photographer Yuliya Fedorinova took some pictures of BitCluster’s mining operations in -40 degree weather. (Bloomberg)

Argo Blockchain CEO welcomes more regulation of cryptocurrencies.

  • Peter Wall, CEO of exchange-listed mining company Argo, told Bloomberg that bitcoin’s parabolic gains naturally “come with more regulatory attention,” which includes some “push and pull.” His company thinks “some guardrails are good.” Shares of Argo have soared over 600% in the past three months, currently trading around $1.46. (Bloomberg)

Galaxy Digital launches its mining unit and miner finance (“MiFi”) services

  • Publicly traded digital asset manager Galaxy Digital announced the launch of its proprietary mining operations and a suite of miner-focused financial services, including lending, investment, and risk management offerings. The project is led by Fidelity’s former director of mining, Amanda Fabiano. (CoinDesk)

Research

Kazakhstan Mining: Read the unique advantages and challenges Kazakh bitcoin miners face in the Hashr8 research team’s latest report. A valid email address is required to download the report.

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