BitcoinSpot ETF is expected to jump up and down, but Miner have nowhere to mourn

Will BitcoinSpot ETFs be the end of Miner?

BitcoinSpot the ETF has come and gone, the SEC has managed to capture market sentiment, and the focus is on BlackRock and the bull-short battle, but the sadness of Miner has been ignored.

The inscription is hot, the Miner makes a lot of money

In 2023, in the context of BitcoinHalving, Miner chose to support inscriptions to increase fee income outside of Mining, but Spot the arrival of ETFs, it will not hurt Miner interests in the currency price, or even help them increase passive income:

1. Spot ETFs Through this, more traditional investors and individual retail investors can legally buy Bitcoin, supporting the market price of Bitcoin;
2. Layer 2 protocols such as the Lighting Network will be legalized, and small, high-frequency on-chain activities will continue to increase Mainnet fees, thereby stabilizing the ecosystem.

Unlike when Ethereum turned to PoS, the Miner were powerless to resist, and ETHW and other projects were ultimately over, the power of the trinity of BitcoinMining Rig manufacturer + Miner + Mining Pool was not weak, and in the past Block expansion wars and the recent inscription wars, the Miner’s dominance over Bitcoin was not inferior to that of Bitcoin manufacturers and core development groups.

But in front of asset management giants such as BlackRock, the trillion-level scale of the entire crypto market is not enough. Although BitcoinMiner doesn’t say it on the surface, judging from the trend of currency holding data, the past two months have been spent in continuous selling. Although there are concerns about the late passage of ETFs, which is favourable information of falling prices, in the long run, Miners are aware of the problem.

**Pricing power will be transferred from the combination of on-chain + Miners to off-chain + Wall Street. **

Pricing Power for Migration: East-> West, Satoshi Nakamoto–>Miner–> Wall Street?

**The core of Bitcoin’s pricing power is Computing Power. **

After the decision in 2021, Computing Power will inevitably transfer to the West, especially the United States, this is no longer to be said, and the geographical distribution is relative to the continuous concentration of mining pools, driven by capital efficiency, Miners and Mining Pools have reached an alliance, Miners still have control of Mining Rigs, and Mining Pools are responsible for daily maintenance, the operation logic is very simple:

Miner income = (mining rig cost - electricity cost - mining pool fee) X number of mining rigs X depreciation rate

During the entire bull and bear period, the often said shutdown price is the most dangerous for mining pools and mining rig manufacturers, because miners can always sell coins to return to their capital as long as they hold on to the bull market, but mining rig manufacturers and mining pools are engaged in the service industry of “selling water”, and once the income cannot be offset by expenditure, they will face a business crisis.

In essence, the loss of Miners belongs to the income from selling coins, which cannot cover the existing expenses, but the actual expenditure is only electricity, and it is really impossible to sell coins and return part of the funds.

Mining pool concentrated, gangsters ashore

15 years since the first block of Bitcoin, about 10 years since Bitcoin used mining rigs on a large scale, although the PoW mechanism left by Satoshi Nakamoto is not environmentally friendly, but it has helped Miners survive at least 5 rounds of bulls and bears by relying on robustness, which can be called a great achievement.

The original miners are not exactly the capital game, more participants are “gamblers” from the bottom of society, including Internet café owners, crypto geeks and inexplicable pioneers, the rough and chaotic early stage of this market created the initial deification of the rich and rich, and the cost of Build a Position of micro-strategies is four or five figures, and their costs are even single digits.

But now everything is about to change.

Bitcoin price will be driven by Computing Power, turning to market + sentiment + Wall Street driven.

BitcoinSpot ETFs are not the same as futures ETFs, or even ETFs of crypto miners, which will fundamentally change the pricing and operation logic of Bitcoin.

Driven by capital appreciation, the trend of chip concentration in existing Bitcoin will be further exacerbated, and the concentration of Bitcoin holdings is already quite dispersed compared to other currencies, and the BitcoinComputing Power is so large that it is almost impossible to attack or Bitcoin control the 51% of the network achieved by attacking or controlling it.

But this is the logic of PoW, if a large number of capital giants pour in, the Bitcoin network will become a PoS mechanism to some extent, of course, this is not to say that the generation of Bitcoin will become a staking mechanism, but to say that chips are overly concentrated, may be reversed, theoretically Spot is the basis for the pricing of Derivatives, but under the excessively long transmission chain, there is a possibility of imbalance in the regulation and pricing mechanism.

Recall the subprime mortgage crisis of '07, subprime mortgage means constantly packing junk bonds based on preconditions and selling them, and the initial mortgage no longer has a significant regulatory effect on the market, and Bitcoin also has objective conditions for repeating this situation.

Spot shelves, consortium fire, Miner died violently, how pleasant it sounds

Bitcoin still lacks ecology

The popularity of the inscription and the popularity of the second layer are still based on the sewing and mending of the old mechanism.

The original role of Bitcoin has been repeatedly said that everyone is impatient - peer-to-peer electronic cash, during the Bear Market, the Lighting Network-based micropayment innovation has been tried in Latin American countries such as Argentina.

But now, people are picking up the sanctity of Bitcoin but abusing the block space by cramming.

In terms of the popularity of Bitcoin, both Bitcoin ATM and on-chain active Address have been declining slightly recently, Bitcoin physical hardware is needed to physically establish a human-to-person, peer-to-peer link, which may expand significantly with ETFs.

And on the active address, Bitcoin is gradually deviating from the psychological expectation of 1 million, showing a strange scene of “on-chain flowering and off-chain heat”, everyone is talking about Bitcoin, but on the contrary, it is gradually moving away from the use of Bitcoin, a currency, an electronic money How to circulate if no one uses it?

There is a logical circle here: the lack of ecology leads to no use, the lack of use leads to the lack of support for the currency price, the lack of currency price leads to Miners to sell coins, the Miners sell leads to the Coin Hoarding of OTC funds, and OTC funds gradually grasp the pricing power.

This is essentially no different from the Internet’s burning money to occupy the market, as long as you burn money to occupy the market in the early stage, then after obtaining the monopoly market, you can continue to collect “ground rent” and eat up the dividends of one industry after another.

Nowadays, under the Favourable Information sentiment of ETFs, the year-end Options of Bitcoin has gone all the way to more than $51,000, seriously deviating from the Spot market price, and the price of Bitcoin has little to do with its role and MinerComputing Power.

In the blink of an eye, the price of Bitcoin fell rapidly from $45,000 to 40,000, and the price Fluctuation was comparable to that of AltCoin.

Conclusion: Sacredness is bound to Rekt

Spot ETFs have not yet arrived, basically have shattered the Computing Power pricing system established by Miners for many years, people often say that Bitcoin is different from other currencies, is a unique fireworks, and gradually established a religious-like sacredness among believers, now, once dreams are shattered, dust returns to dust, you don’t see, you can’t even hear the voice of a Miner, maybe they are still immersed in the heat of the inscription and the laughter of coin realization.

BitcoinSpot ETFs are free to move forward and retreat, but will the last PoW Miner power go down in history?