I read an interesting tweet today from Michael Saylor, the tweet saying that "Bitfarms $BITF deposited 96% of their BTC production into custody this year rather than sell it on the open market. If other publicly traded miners do the same, Bitcoin stock to flow is going to infinity. Then it is going negative. This is not factored into anyone's model."
I have to be honest about that and admit that I have never thought of Bitcoin miners from that perspective. They could sooner than later become "money issuers". How?... Quite simple, the answer is to be found in a comment on the tweet quoted above.
BTCAnalytics was saying in that comment that: "SovrynBTC(DeFi for Bitcoin) intend to create USD pegged stable coins backed by over collateralized Bitcoin". That's mind blowing for me to be honest.
Until recently we were in the situation where most of the miners had to periodically sell stashes of their "fresh new mined BTC" in order to keep the business running and have it profitable. As development pushes crypto forward we might find ourselves in the situation where miners become HODLers. They'll simply stake it and move on with mining.
DeFi is already moving a lot of the crypto industry into automation and we're currently at a stage where the whole purpose of a project is nothing more than just creating new tokens for its HODLers(DeFi participants). If the majority of the miners will refuse to sell, as they did(selling) for the past one decade or so we're gonna be hit by a supply shock like never before.
I don't think, however, that all of the miners will take such an approach or that the ones doing it will be able, or willing, to stake everything they mine, but even if they do as Bitfarms $BITF has done for the past year, by moving 96% of its Bitcoin into custody, we're definitely going to see that supply shock Michael Saylor was pointing at and a huge price appreciation imo.
The mathematics of this industry will be drastically reshaped and probably most charting models and TA won't make any sense anymore. The industry is changing at such a pace. I was in crypto, this time around, four years ago, but it wasn't anything like what we have now. El Salvador just announced they're starting mining Bitcoin with volcanic energy, and now this...
There's gonna be a global hash rate war, sooner than later, and putting your hands on an actual Bitcoin, like the ones some folks used to pay for pizza many years ago, will be harder than we can imagine. I honestly don't have the necessary data on how these miners are staking and who are the custodians, I have to also check this DeFi for Bitcoin thing, but smells a bit like centralization in works for Bitcoin.
At least from the perspective of distribution of the coins we won't be able to talk much about decentralization. Interesting concept to think about though... Miners not having to sell anymore and becoming money issuers. Is that even possible, what do you think?
Thanks for attention,
Adrian