Citibank: bitcoin price is low due to the miners and merchants pile up in excess of requirement
The financial giant Citibank, according to a new report, the miners and merchants make bitcoin supply excess, and inadequate demand, making bitcoin price slump.
Because the whole cost of mining, the miners need to sell new bitcoin mining to recover the investment cost of equipment. Citi said there are 3500 bitcoins mined every day, and daily trading volume in recent months is between 60000 to 10000. The report said: “if the miners bitcoin stable supply, and the final demand has not increased, so these coins for sale in the market, the result is a downward pressure on prices.”
Businesses increased price pressure
To accept bitcoin Citigroup businesses have different opinions.
In the bitcoin fans view DELL and Expedia to accept bitcoin is tread on air. However, Citigroup noted that businesses received bitcoin directly converted into currency, resulting in greater pressure to the sales price of bitcoin.
In addition, it pointed out that the accounting rules hinder those who accept bitcoin big coins, even businesses are willing to hold.
In the generally accepted accounting rules (GAAP), the company can not hold bitcoin as risk aversion measures, because the risk of fluctuations in digital currency. They had it bitcoin assets as speculative positions, which will increase the risk of enterprise.
In other words, large businesses won’t drive an increase in bitcoin demand, they are not long-term holders of bitcoin.
“For companies to accept bitcoin and hold a derailment behavior. “Citigroup’s report.
Weak consumer demand
With the miners and merchants selling bitcoin increase, according to the principle of bitcoin consumer demand should also be increased, however, Citigroup said did not see the event.
According to the reports, bitcoin benefits did not make people aware of the street, so few people use credit cards instead of coins.
Those people who use bitcoin bitcoin is not to use as money, but because of love, which became a bitcoin demand buoy. But judging from the market, obviously this kind of love is not sufficient to prevent bitcoin price slump.
Other market observation also agree with this view, the London Stock Exchange Coinfloor chairman Mark Lamb said, the pressure in recent months have strengthened, businesses may be miners and traders.
“Last year to sell only a small part of the miners to dig bitcoin, at present, they will sell 70-90% bitcoin. Businesses have sold quite a lot of bitcoin. So we often have buyers.” He said.
Big money without help
Bitcoin investors hope bitcoin prices rose, adding $200 million hedge fund and $150 million Pantera capital Global Advisors the signal may be rising. Especially Pantera capital, only bitcoin bulls, and that there is a great increase in space.
Citi’s Steven Englander, the report’s author and Citibank global industrialized economies, head of foreign exchange strategy, he does not think so, he said: “the indications are that the merchant’s sales slowing, investors may buy those high flesh, rather than opening