Ki Young Ju
Ki Young Ju 2 minutes reading from Bitcoin

5 Reasons Bitcoin Might Resist This Time in 2016

BTC miner capitulation might play out differently this time.

Less likely, but it could be bullish if someone(s) acquires US-based Bitcoin mining companies and their crypto holdings at a significant discount this year.

Thread 🧵

1/

BTC hash rate hit an all-time high again. Why?

U.S. miners are running mining rigs at full capacity to repay the financing debt owed on equipment it was leasing.

Foundry USA pool took 42% of the total hash rate for the last 24 hours, the largest dominance since 2014.

2/

Some mining companies who have used the FoundryUSA pool are filing for Chapter 11 bankruptcy or reporting significant losses for the past few months.

And FoundryUSA is DCG's subsidiary, indicating they're not safe enough from the FTX contagion risk.

Bitcoin miner Core Scientific is filing for Chapter 11 bankruptcy — but plans to keep mining

3/

Bitcoin hash price renewed a four-year low a few days ago, indicating that BTC mining ROI is still very low.

Historically, when small & mid-sized miners go underwater, they capitulate by selling all Bitcoins and mining rigs. But this time might be different, because...

4/

... U.S. miners now are not small & mid-sized miners anymore; they're 'institutional' miners.

If someone(s) buys the whole mining company and crypto assets with a discount, it won't directly affect selling pressure to the markets.

5/

We never know whether someone(s) would acquire the bankrupted crypto companies and their assets, but once it happens, it will remove the systemic risk significantly.

Hope TradFi or tech giants acquire U.S. crypto companies and their crypto holdings at a discount this year.

This post is based on this twitter thread.

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