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Recently, F2Pool, the mining pool with the highest computing power in the entire network, has caused heated discussion due to the concentrated and large-scale net outflow of Bitcoin from its participants since mid-January.
According to the data analysis platform CryptoQuant, before mid-January 2021, the daily outflow of Bitcoin has not exceeded 2,000 since September 2020, and there has been almost no change even when the price of Bitcoin exceeded US$40,000; after mid-January 2021, the daily outflow gradually increased from 4,000, 8,000, 10,000, and a maximum of more than 14,000. It is worth noting that the price of Bitcoin fluctuated around US$33,000 during this period. On February 1, F2Pool co-founder Wang Chun said on his Twitter account Chun@satofishi that he had sold $4 billion worth of Bitcoin in the past few weeks. In the past decade, F2Pool has mined more than one million Bitcoins, and this sale accounts for 10% of F2Pool's own reserve Bitcoins. The tweet attracted industry attention.
“Outflow” does not mean “selling”
In response to Wang Chun's tweet, F2Pool founder Shenyu said that "selling $4 billion worth of Bitcoin" was a satire, mocking some users who suspected that the price drop of Bitcoin was caused by F2Pool's selling. In the past ten days (January 12 to January 22, 2020), F2Pool has lost about 45,000 Bitcoins, totaling about $1.4 billion. Shenyu replied that F2Pool currently has a mining output of more than 1 million Bitcoins, and due to its long history, it is associated with most exchange addresses.
In response to this incident, the data provider and data analysis platform CryptoQuant also confirmed on Twitter that F2Pool itself did not sell a large number of Bitcoins, and the selling trend came from the whales who participated in the F2Pool mining. The recent large-scale increase in the outflow of Bitcoin from the F2Pool is due to CryptoQuant marking all addresses involved in the F2Pool mining rewards as the same type. Currently, CryptoQuant is trying to solve the problem of address marking concentration.
From the CryptoQuant data, it monitors all addresses related to a mining pool, most of which are addresses of miner clients, so its monitoring data may reflect the behavior of miner clients more than the behavior of mining pool operators. Jessica, an insider of F2Pool, told our reporter that we only provide technical services, and the concentrated outflow of miners has nothing to do with F2Pool.
Jiang Zilong, head of OKLink's business, explained to our reporter that, to be precise, it should be the situation of miners in the mining pool buying coins. And according to CryptoQuant's data, the day with the largest amount of "selling" was January 29, with the largest amount being about 16,000 BTC, which is not considered a sell-off. If calculated by price and volume, more than 6,000 BTC flowed out on March 12, and more than 7,000 BTC flowed out on July 20, both of which are relatively large. The impact of the previous outflow of BTC on the price is not very significant, which can be understood as sufficient turnover, or it can be understood that the confidence of the main force has not been greatly affected by the mining pool.
Jiang Zilong believes that the accuracy and behavior definition of this data cannot be perfect. First of all, it is difficult to track all the behaviors of the mining pool with the address label, and how to define the relationship between "outflow" and "dumping" remains to be verified. Assuming that the address label is accurate, it can only be defined as the miner's BTC outflow on that day. The behaviors of traders, institutional investors, and miners in the market affect the price, but from the perspective of active addresses and new addresses on the chain, the fundamentals of BTC have not changed substantially. In comparison, we can see that at the end of the last bull market, the number of new BTC addresses changed significantly. There was a callback this time, but the number of addresses did not change substantially. BTC growth expectations are obvious This large-scale net outflow from F2Pool is not an isolated event. At the end of June 2020, CryptoQuant data showed that a total of 7,153 BTC (US$68.1 million) flowed out of the two mining pools, HaoBTC and Poolin, in one day. This also happened when the market was full of hope for the rise of Bitcoin.
Under what circumstances would a large mining pool or whale miner sell off Bitcoin on a large scale? Jiang Zilong told our reporter that it usually happens when there is cost pressure and labor costs and electricity bills need to be paid; another is when Bitcoin is at a high position and some BTC is actively sold, but the probability of this happening is small because miners generally hedge to lock in profits.
Max Hu, operations director of 360 Computing Power, told our reporter that the interaction between CryptoQuant and F2Pool on Twitter, and the discussion it sparked, actually reflects everyone's close attention to the "centralization of computing power/Bitcoin output". As the difficulty of Bitcoin mining increases, institutional miners are making inroads. If small and medium-sized miners want to stay in the game, they are fighting for survival. Learning to rely on the scale advantage of the platform is the key to breaking through. As the "centralized and decentralized" hub, the cloud mining platform will be an important ecological builder in the future mining ecology, creating a balance between institutional miners and small and medium-sized miners.
From the current development structure of mining pools, the most original profit model of mining pools is to earn mining pool fees by providing mining pool fees. Due to the competition among multiple mining pools, the fees charged by each company are getting lower and lower, from 4-5%, to 2-4%, and then to the lowest close to zero. In May last year, Bitcoin just halved, and the profit space of mining pools was squeezed more and more. Excluding the daily operating costs of mining pools (such as hard payment of Bitcoin to miner customers to resist fluctuations in luck value), the number of Bitcoins actually controlled by mining pools is not as much as everyone imagines, unless the mining pool is connected to other products and services to increase the amount of coins in its own ecosystem.
Even though there was a large outflow of Bitcoin from miners in large mining pools, Bitcoin still performed well. Jiang Zilon believes that sufficient turnover has made the market liquidity digestion efficiency very high, and market enthusiasm and loose monetary policy have made BTC growth expectations obvious.
"This result is not surprising. In this bull market, the price of Bitcoin has soared, but the Google search volume is far from the level of the last bull market, which shows that large institutional investors have built a "thick bottom" for Bitcoin, which can digest large sell orders and keep Bitcoin in a relatively stable and long-term bullish stage. At least when compliant Bitcoin ETF products still have a positive premium, the price of Bitcoin should continue to hit highs." Max Hu analyzed that this incident did not cause a large fluctuation in the price of Bitcoin. (Huaxia Times) |
