Matt D’Souza is one of the most knowledgeable people when it comes to Bitcoin mining. In fact, at our recent Crypto Asia Summit he received the award for most knowledgeable. We took the clip above from his presentation that covered mining difficulty, Bitcoin sell side pressure, Bitcoin mining in China and US, and other factors that affect price and the network. In this particular clip, Matt goes over the three main participants in Bitcoin and their role when it comes to affecting price.
Prior to the halving, Matt’s company Blockware Solutions released a report that goes into great detail on the “Vulnerabilities in the Price of Bitcoin Driven by Miners“. The three main participants he identifies in the clip above are hodlers, funds, and miners.
Hodlers, by definition are people accumulating and holding Bitcoin long-term. They’re prepared to hold BTC at its lows and highs. These people are typically always bullish and long Bitcoin.
Funds would be any institution trading or investing in Bitcoin. They’re also typically long and bullish, although they may trade back and forth during different market cycles.
Matt argues that miners are the most bullish on Bitcoin because they are investing in facilities, ASICs, and infrastructure to maintain their operations. They’re constantly accumulating Bitcoin at the lowest possible price and dollar cost averaging as Bitcoin’s price fluctuates over 2-4 years.
After the latest halving, the hashrate dropped 30% as many old machines are starting to become obsolete. The security of the Bitcoin network still remains strong but we’re seeing a cleansing of inefficient miners. With the launch of new mining machines from Bitmain, many miners need to either move to the new machines or face the possibility of not being able to compete with more efficient miners.
Another interesting point that Matt points out is that Chinese rainy season is about to start. This generally causes electricity to go down which is a favourable variable for miners in China.