Bitcoin analysts believed the recent drop in Bitcoin that caused a scare was due to mining problems experienced. Operating a business for Bitcoin has a cost and if many are unable to pay those costs they have to sell off coins to pay which affects the market. Another issue was the inability to produce enough coins for sale on the platform. These were considered the main reasons for the March 26, 2020 drop in price.

Matt D’Souza is the CEO and co-founder of Blockware Solutions and spoke to Cointelegraph about the recent development.

D’Souza said:

If Bitcoin is further adopted in 10 years, mining will likely be more commoditized and institutionalized which will reduce volatility in the price of Bitcoin. Present commodities like gold, oil or soybeans have large, institutional suppliers while Bitcoin miners are the present suppliers.

He also shared what he found on Twitter. It was evident that he felt all of BTC’s problems were related to mining in one way or another.

Matt D’Souza tweeted:

After shutting off, Bitcoin they were receiving is allocated to the more efficient, experienced miners with excellent margins who are positioned to accumulate a larger percentage of the newly minted Bitcoin rather than having to sell it — significantly reducing sell pressure.

The Chainalysis, a Blockchain Analysis Company’s report read:

When miners send to exchanges, they are adding new liquidity to the market. This increases the supply of Bitcoin available on the market, potentially lowering the price. Aside from Bitcoin received from other exchanges, mining pools are the most important source of Bitcoin flowing into exchanges, followed by hosted wallets and merchant services.

It seems evident that the market settles better when those investors who can afford any loss or operational costs are the ones buying into the market.

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