Impact of mining-related supply on Bitcoin price

How does Bitcoin mining affect the coin supply?

To be clear… It is the act of mining that creates supply. BTC coins are generated for every block discovered by miners. Currently there are just over 6 every 10 minutes. So miners will be the first to own the coins and will either hold on to them or sell them to pay some bills.

With only 21 million coins to be mined, the product is of course a scarce commodity. If miners who have been holding their coins for years decide to sell everything they have for some reason (they go out of business, lose confidence in the product, or country regulations prevent this (e.g. China)), they may lose a lot of the product. may flood the market. After this. In this case, which direction the price goes cannot be determined by oversupply.

Given today’s climate where near events (ETFs and halvings) are expected, prices may go up, but this has nothing to do with oversupply as in the case above. In fact, in any rational market it would go down.

In a rational market, supply meets demand at various price points (taking into account the cost of making more or less of the item) as prices rise to a certain degree, and demand declines because it is usually higher than what one is willing to pay. In the Bitcoin market, this is not true due to one small caveat. Supply is limited and fixed, and demanders have deep pockets.

How is the price per coin on the exchange reflected?

Miners do not set the price. They can only hold out until the market price agreed upon by the seller and buyer is reached. Of course, the price is what people are willing to pay and usually anticipates an upward trend or need.

The price of this rare commodity was determined based on the following values: store of value; Of course there is also limited supply/originality.

The only way I can imagine that supply would affect the price is if the protocol were changed to allow more than 21 million coins to be mined. Of course, this cannot happen in Bitcoin.

From the miner’s perspective, their main revenue is based on mining coins and collecting transaction fees that do not directly affect the price.