The price of bitcoin core (BTC) has dropped considerably over the past few months, significantly affecting individuals and organizations that mine the cryptocurrency. According to recent reports, many miners in China are now short selling bitcoins to hedge against falling digital asset prices.
Some Chinese Miners Are Short Selling BTC
Due to the recent low prices of many cryptocurrencies, mining has become less profitable. Back when digital asset prices were higher, miners would hold coins for longer periods of time, but one Chinese miner believes this is no longer the case. Earlier this week, miner Jin Xin told a Chinese-language news outlet that many of his fellow miners have been short selling BTC to hedge against bearish market conditions.
“If I mine 30 coins in the next month, while the price may continue to fall by another 10 percent according to the current trend, I shall place a short order on the exchange to sell them at the current price, but deliver one month later,” Jin said.
The Chinese miner further explained that a large number of local miners are short selling as an act of “self-defense.” Jin said that unless they short sell BTC, some miners will be “ultimately eliminated.”
He also explained that he has been purchasing secondhand miners and using them until the machines reach the point of unprofitability. He then dismantles them and sells off the parts. If cryptocurrency market sentiment becomes bullish again, he said that he will purchase more machines and repeat the cycle.
The BTC hashrate has declined considerably over the last three months. » Read Full Article «