Yes. To a degree, the current stagnation is caused by selling pressure from miners. I have no way of quantifying how much of it is miners, how much of it might be due to large entities "guiding" the market (what conventionally is called "manipulation" in here, but really isn't) and how much of it is simply due to the larger user/trader/investor base being more interested in selling than in buying right now.
In any case, here's my (semi motivated) opinion on this matter:
- production cost is a price attractor. It neither means market price can never go _below_ that cost (enough momentum and selling pressure from other sources can certainly do that), nor does it mean that it cannot stay _above_ for long. It is good to keep production costs in mind, but there is no immediate way to derive the price from them (although I do believe that the production cost provides a strong point of price resistance, and overcoming it is not easy absent of strong pressure downwards)
- the concentration process of mining since the ASIC revolution has led to, I believe, higher overall selling pressure by miners, in the sense that mining became more professional, and as a result: less ideological about holding. A guaranteed small profit is usually preferable over a large speculative one. I don't want to claim miners throw everything on the market immediately, but I suspect the amount of coins sold vs. coins held for the "Bitcoin endgame" changed towards a higher selling portion.
- I also believe a substantial amount of the coins mined and sold are sold off-exchange, to large entities interested in building a position (like, for example, to launch an ETF). Opinions vary if this creates downward pressure on price or not. One position says that, since coins sold off-exchange are not part of the floating capital, they cannot affect price. I personally disagree: the market and its participants have come to expect certain amounts of fiat being moved to the exchanges and expect trade volume in USD to substantially increase as per coin price increases. If more of the large orders are filled off-exchanged, that fiat is perceived as "missing" and negatively affects the price.
- Finally: opinions differ on what the production cost per coin is currently. I personally think that a number of calculations are too "bullish" in the sense that they overestimate production cost, because they tend to think from the perspective of small to mid sized miners, ignoring that a decent part of current hash power comes from large farming operations that operate on a different cost basis than smaller scale miners. My own calculations arrive at an _absolute minimum_ of around 470 USD per coin, for mining operations that can utilize electricity and employ mining hardware at a greatly reduced cost compared to smaller scale miners.
Topic: Constant Downward Pressure Due To Miners? - page 3. (Read 3633 times)
Bitcoin rate of inflation is about 11% p.a. at present. USD rate of inflation is harder to measure. But let's assume 3%. Thus there is a net annual downwards pressure on BTV value relative to the dollar of about 8%. This will fall to 2.5% (5.5% - 3%) when the block reward halves in 2016. Of course this assumes no changes in the demand for BTC up or down, which is entirely unrealistic.
Looking at a 1 yr chart you will notice that Bitcoin constantly get's beaten down since December 2013.
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
No, when difficulty rises. The same miner that produce 1 BTC might produce only half BTC. So the selling pressure should go lower.
Looking at a 1 yr chart you will notice that Bitcoin constantly get's beaten down since December 2013.
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
I don't think its the miners. More of the news (we were at 800 comfortably until gox collapsed). Then China FUD, now news of the auction.
Looking at a 1 yr chart you will notice that Bitcoin constantly get's beaten down since December 2013.
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
For your convenience: http://bitcoincharts.com/charts/bitstampUSD#rg360ztgSzm1g10zm2g25zv
The November 2013 rise to $1,200 also caused an immense rise in hashing power and difficulty (because mining suddenly was so profitable).
So this correlates.
There is no free lunch, somebody has to pay the immense mining network (electricity, hardware, etc).
It looks like the Bitcoin holders do, because I'm sure that miners have to sell a large portion of mined coins on a daily basis just to cover electricity.
And that's exactly what the charts are reflecting.
Looking at it this way, the downtrend will only accelerate as difficulty rises?
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