/1 The first difficulty adjustment post-halving is indicative of an ~15% hash power ratchet down. 
/2 This is somewhat in line with the model mix assumed by @BlockwareTeam's report in March (blockwaresolutions.com/research-and-p…) where S9's were seen at 38.6%. That number probably trended down as miners positioned into the halving and upgraded equipment.
/3 A material difficulty adjustment downwards can be understood as a bloodletting of the weakest mining participants. Parri passau, these miners are obligated to sell the largest % of rewards to cover costs. Lower cost miners could also sell all inventory, but are not mandated.
/4 The broader context is that daily emisson has been reduced from $17.5MM to $8.75MM. This number may at first seem small when compared to daily trading volumes. It would be a mistake to use that as the reference point.
/5
1. The majority of reported volumes are fake with few exceptions.
2. Spot selling (miners) has a larger impact on price than derivative sells, and derivs are the majority of reported volume.
3. Miners are price insensitive, applying more pressure to price vs. traders.
1. The majority of reported volumes are fake with few exceptions.
2. Spot selling (miners) has a larger impact on price than derivative sells, and derivs are the majority of reported volume.
3. Miners are price insensitive, applying more pressure to price vs. traders.
4. The majority of trading volume is turned and turned. A trader can churn $100MM in deriv volume and end the day at the same exposure. OTC desks and arb funds also. That is markedly different from one-time sales of miners.
/6 All in, lost in the excitement going into halving day is the mark up engine that is a reduction of $8.75MM in axed sellers, day in and day out.
/7 CORRECTION: approximately a 4.5% difficulty adjustment, not 15% as written (misread axis, h/t @spooklonaut).
Surprisingly small downward adjustment.
Surprisingly small downward adjustment.
