Reports on Friday 7th December 2018 had it that Chinese cryptocurrency miners were opting to short sell Bitcoin to cushion themselves against the falling prices. Cryptocurrency has endured a tumultuous year due to falling market value and instability. Bitcoin, in particular, has had a torrid year recording its ever lowest market value after reaching a peak in 2017.

The drop in market value has translated to losses for miners and other cryptocurrency investors all across the globe. Cryptocurrency miners in China have resorted to short selling Bitcoin to curtail themselves from incurring losses.

Jin Xin, a Chinese crypto-miner remarked, “Many of my fellow miners are short-selling Bitcoin to hedge against the unbearable market conditions.” He went on to further add, “If I mine 30 coins in the next month, the price may continue to fall by a further 10 percent. I shall place a short order on the exchange to sell them at the current price but deliver one month later.”

Act of self-defense

It is understood that the Chinese cryptocurrency miners are doing so as an act of self-defense. Jin was quick to further remark, “Most of us are doing this as an act of self-defense. Unless they short sell Bitcoin, some miners will be completely eliminated. The current market trends force them to do this to keep their families afloat.”

Not only have miners been short selling Bitcoin, but some of them like Jin have also opted to purchase second-hand miners. Once they purchase second-hand miners, they use them as machines until they reach a point of unprofitability. The machines are then dismantled and the parts sold off. According to Jin, if the market continues to be harsh, he will buy more machines and repeat the cycle.

There hasn’t been a lot of optimism in regard to a change in the fortunes of Bitcoin. It remains to be seen what other unscrupulous methods cryptocurrency miners will come up with in order to stay relevant.