Yep there is no floor under the bitcoin price, but there is a roof over the mining cost, which is the price, modified by the usual stuff like speculation in mining equipment.
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Celebrating the upcoming "1MB Is Dead" event
- Thread starter solex
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- Aug 22, 2015
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Consider that not all miners are working for profit in fiat (maybe some pool owners are, but many hashers are not). They mine because they think they can obtain BTC cheaper than by buying in the market. If the price falls such that their mining is unprofitable, then automatically it becomes cheaper for them to buy in the market instead.
This makes sense while the mega-trend is up. The long downtrend since December 2013 is a retracement from an over-exuberant bull-run, it is not despair at the long-term future of Bitcoin.
Obviously, if the ecosystem growth is stalled, VC investment dries up, development stops, and lots of Bitcoiners are moving back to fiat or another crypto, then the mega-trend is reversing. Miners would chase the price ever lower. I don't think that this is where we are.
This makes sense while the mega-trend is up. The long downtrend since December 2013 is a retracement from an over-exuberant bull-run, it is not despair at the long-term future of Bitcoin.
Obviously, if the ecosystem growth is stalled, VC investment dries up, development stops, and lots of Bitcoiners are moving back to fiat or another crypto, then the mega-trend is reversing. Miners would chase the price ever lower. I don't think that this is where we are.
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At the Hashers United conference in Vegas last year, Michael Terpin polled the audience of miners as to how many sold their coins right away. Hands raised, none.
Certainly most hashers, who don't have the enormous overhead of pool operators with inventory, don't have the pressures to liquidate right away, in general. They are in it for the coin. They know that as a fixed supply currency with a bright future, it should go up. And by a lot. It's worth the investment to accumulate as many coin as you can, as fast as you can.
Because you never know when the next logarithmic move will come.
Certainly most hashers, who don't have the enormous overhead of pool operators with inventory, don't have the pressures to liquidate right away, in general. They are in it for the coin. They know that as a fixed supply currency with a bright future, it should go up. And by a lot. It's worth the investment to accumulate as many coin as you can, as fast as you can.
Because you never know when the next logarithmic move will come.
