Large mining companies have accumulated too many Bitcoins and can destroy the cryptocurrency market

Big miners are a danger to the entire cryptocurrency market.

    The last few months have been difficult for the cryptocurrency market. The first disappointment was the fact that by the end of 2021, the price of Bitcoin had not reached $100,000. For a long time, experts tried to find an excuse for such an obvious inconsistency with statements made throughout the year, but they did not find anything suitable except for raising the Fed's rate. Someone even talked about crypto winter, but so far nothing has happened, because despite the marking time, digital gold continues to be in considerable demand. 

    And in general, not everything is so bad. Today, Bitcoin is trading at close to $42,000 and showing a steady rise. Indeed, one of the main problems is the Fed's rate hike and high inflation in the US, but there is one factor that worries experts much more than such events. All of 2021, major miners reportedly accumulated bitcoins. It would seem that this is so, because everyone is free to dispose of the mined coins at their own discretion, but in reality everything is a little different. Let's see how the market works today.

    So, most of the mined coins are concentrated in the hands of the seven largest miners. They own huge capacities and continue to constantly increase the capacity of the network through the purchase of new equipment. These guys have an advantage over ordinary farmers because they are free to get ASIC miners directly from manufacturers, which guarantees them low prices and a privileged position.

    Theoretically, to maintain the giant factories for the production of Bitcoin, enormous costs are required. This includes payment for electricity, and the maintenance of maintenance personnel, not to mention the constant updating and purchase of equipment, which we wrote about above. In general, the owners of such factories themselves are not averse to buying a new yacht or a couple of hundred expensive NFT tokens.

    Until 2021, miners did spend some of the coins they received on all these needs, but afterward, they switched to a new strategy called HODL. Let's not go into details and note only that the essence of the scheme is to attract large investments to continue work. It turns out that the owners of the largest Bitcoin mining farms have long ceased to flood the market with new coins. They get along just fine with the hundreds of millions of dollars that investors give them, creating a dangerous situation for the market.

    Experts believe that everything is going well for these companies today, as money flows to them like a river, but changes are brewing. The US and European authorities will take control of cryptocurrencies. If you doubted that this would be the case, then remember the pressure American politicians put on the entire cryptocurrency network as part of the new anti-Russian sanctions. Most of the major players somehow made concessions, but these were only recommendations from the guys from the Pentagon. Imagine what would happen if all of this were legal. Experts fear that the regulation of cryptocurrencies could lead to a sharp collapse. In this case, investors will demand the return of the money they gave to the miners. But for this, the miners themselves will have to start selling rapidly depreciating Bitcoins. This will create an oversupply that will roll like a wave, but the consequences for Bitcoin and the entire cryptocurrency market will be fatal.