Recent data shows that BSV miners are increasingly holding their block rewards instead of selling them in the market. Some argue that this is the result of falling demand for the asset.
Celebrating 1 year anniversary
Bitcoin SV celebrates its first year of mining today since Bitcoin Cash forked hard and evolved into the “true” Bitcoin protocol. The project has tried to compete with both Bitcoin Cash (BCH) and Bitcoin (BTC), but its mining hashrate has remained around 100 times lower than that of the leading cryptocurrency.
The BSV did not achieve the expected success either. Instead, several major exchanges, including Binance, delisted the coins after the doxxing attempt against Hodlonaut. After that, the price of BSV fell to $ 50.
BSV miners are still receiving 12.5 coins per block and have currently produced more than 20,000 coins than the BTC network. However, according to Alistair Milne, CIO of the Altana Digital Currency Fund, over 50% of the BSV mined never move out of miners’ wallets. He claims that this was due to the lack of organic demand from cryptocurrency investors. If miners tossed their BSV on the stock exchanges, no one would buy them and the price would plummet afterwards.
Around 50% of all mined $ BSV are never moved. Hoarded by miners unable to sell as it would freeze the price due to a lack of organic demand.
How long can you hold out?
– Alistair Milne (@alistairmilne) November 14, 2019
If we look at the data provided by Byte Tree, we can see that this theory seems somewhat valid. The table below shows the mining management of BSV tokens and how many have been sold by miners over the year since the project began. As we can see, BSV miners usually sold BSV tokens in bulk every 4 months until they recently decided to go with HODL.
The cumulative inventory line has continued to rise since June of this year as there has not been a third mass sale that should have happened around October time.
If we compare this to Bitcoin SV’s net inventory over the past 12 weeks, the increased HODL rate becomes even more noticeable.
BSV is slumbering as old wallets don’t try to split coins
For BSV, the “hodling” behavior is also part of the expectations that the coin could move forward in the near future. Expectations depend on Craig Wright’s warnings that he would personally enter the markets and destroy Bitcoin’s current price dominance.
It is uncertain whether this scenario will play out. However, in the case of Bitcoin SV, there is also the possibility that many coins are inactive simply because their owners never claimed them. There is always some risk involved in splitting coins through a wallet, and many have chosen to forego the new type of asset.
However, over the past year, the increase in dormant addresses has seen a significant increase, consistent with the observation that coins are being hoarded.
Only a few mining pools support BSV
Speaking of BSV miners: the variety is also lower compared to competitors for BTC rewards. The main pools that solve blocks include ViaBTC, Coingeek, Mempool, and SVPool. It is possible for some pools to hang on to the rewards to protect the prize. Coingeek has been a very active BSV advocate on social media and possibly other ways.
But there are still enough miners out there who can change their loyalty and drop the rewards. The other reason for sticking to coins is that the halving for BSV has been inherited from Bitcoin and may arrive in the spring of 2020. Some pools may be trying to save new coins for future use instead of selling them now.
What do you think of BSV hoarding? Share your thoughts in the comments below!
Images via Shutterstock, Twitter @alistairmilne, diagrams by Byte Tree
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