Many are surprised at which group represents the majority of crypto bears lately as prices continue to fall. Those who got into cryptocurrency last year probably fled the scene with tails and burnt fingers between their legs. That leaves long-term investors, institutional investors and Chinese cryptocurrencies.
Chinese miners play a short game
Like futures, miners can set a price for their currency instead of facing uncertainty in the future when prices may be even lower. Coverage became a necessary skill in the bear market to survive, when four years ago, when there were fewer Bitcoins and less mining difficulty, Hodling was sufficient.
Bitcoin mining has gone through several stages over the years, from garage activity, gaming platform lovers to mega factories and now to the financial model. Now the key is that if the price drops, the miners make a profit, but that profit is canceled out at the lower value of their currency now. As Trustnodes noted, if the price went up, they would soon lose sales, but that loss is now offset by the higher value of mobile currency.
It’s a pretty selfish and devastating approach to the cryptographic ethics that could end up in the bankruptcy of Chinese miners. The smart ones will probably shake until the storm passes and wait for the time when they can sell again at a higher price, instead of trying to make instant profits by destroying the product.