As the Bitcoin spot ETF comes and goes, the SEC has successfully grasped the market sentiment. People's focus is on BlackRock and the battle between bulls and bears, but the sadness of the miners is ignored. Perhaps they themselves are still immersed in the enthusiasm of inscriptions and the laughter of cashing out coins.
Unlike when Ethereum switched to PoS, miners were powerless to resist and projects such as ETHW eventually came to nothing. The power of the trinity of Bitcoin mining machine manufacturers + miners + mining pools is not weak. In previous block expansion wars and the recent inscription wars, miners' control over Bitcoin is no less than that of Bitcoin manufacturers and core development teams.
However, facing the rise of large asset management giants such as BlackRock, the trillion-level scale of the entire crypto market seems insignificant. Bitcoin miners may not publicly express their concerns, but judging from the trend of currency holding data, miners have been selling Bitcoin continuously in the past two months. Although there are concerns that the ETF will be approved and the positive news will be exhausted, in the long run, miners have realized the problem.
As we all know, the core of Bitcoin's pricing power is computing power. After the decision in 2021, computing power will inevitably shift to the West, especially the United States. There is no need to say more about this. In contrast to the geographical distribution is the continued concentration of mining pools. Driven by capital efficiency, miners and mining pools have reached an alliance. Miners still have control over mining machines, while mining pools are responsible for daily maintenance. The operating logic is very simple.
But now everything is about to change. The price of Bitcoin will shift from being driven by computing power to being driven by the market, sentiment, and Wall Street, which will fundamentally change the pricing and operating logic of Bitcoin.
Under the impetus of capital appreciation, the current trend of Bitcoin chip concentration will further deteriorate. Compared with other currencies, the concentration of Bitcoin holders is already quite dispersed. Coupled with the huge computing power of Bitcoin, it is almost impossible to attack or control 51% of the Bitcoin network. 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 does not mean that Bitcoin will become a pledge mechanism, but that excessive concentration of chips may lead to the opposite effect. In theory, spot is the pricing basis for derivatives, but with an overly long transmission chain, there is a possibility of imbalance in the regulation and pricing mechanisms.
Recall the subprime mortgage crisis in 2007, when junk bonds were constantly packaged and sold based on preconditions, resulting in the initial mortgage loans no longer having a significant regulatory effect on the market. Bitcoin also has the objective conditions for a repeat of this situation.
Under the positive sentiment of ETF, Bitcoin's year-end options reached more than US$51,000, seriously deviating from the spot market price. In a blink of an eye, the price of Bitcoin fell rapidly from US$45,000 to US$40,000, and the price fluctuations were comparable to those of altcoins.
In addition, the popularity of inscriptions and the second layer is still based on the patchwork of the old mechanism. The original role of Bitcoin has been repeatedly mentioned, and everyone is impatient to say it - peer-to-peer electronic cash. During the bear market, small payment innovations based on the Lightning Network were tried in Latin American countries such as Argentina.
But now, Bitcoin is showing a strange phenomenon of "blossoming on the chain and becoming popular off the chain". Everyone is talking about Bitcoin, but they are gradually moving away from using Bitcoin. How can a currency, an electronic currency, circulate if no one uses it?
There is a logical vicious circle here: lack of ecology leads to no use, lack of use leads to lack of support for the coin price, weak coin price leads to miners selling coins, miners selling leads to off-market funds hoarding coins, and off-market funds gradually gain pricing power.
This is essentially the same as the Internet's spending money to occupy the market. As long as you spend money to occupy the market in the early stages, then after monopolizing the market, you can continue to collect "rent" and reap the dividends of each industry, from the battle between thousands of food delivery groups to the merger of Kuaidi and Didi in ride-hailing.
Summarize
The spot ETF has not yet arrived, but it has basically shattered the computing power pricing system that miners have built over the years. People often say that Bitcoin is different from other currencies. It is a unique firework that gradually establishes a religious sanctity among believers. Now, Bitcoin spot ETFs can move freely, and the power of PoW miners may become history.
