You might try unit $ cost / GHs graph. I believe BTC price and difficulty affects how much people willing to pay for 1 GHs as initial investment
Second this. It's a useful measure to have that I'm always calculating by hand.
Topic: Correlation Between Bitcoin Price and Difficulty (Read 842 times)
Second this. It's a useful measure to have that I'm always calculating by hand.
You might try unit $ cost / GHs graph. I believe BTC price and difficulty affects how much people willing to pay for 1 GHs as initial investment
As I've said in my other thread, I don't think Bitcoin is overvalued I think that the dollar and paper money is hyperinflated, people are rushing to Bitcoin now like they're rushing to precious metals so they can preserve their wealth.
Difficulty definitely affects how difficult it is to get Bitcoin through mining but the thing you have to bear in mind is that the laws of supply and demand always apply here, if people are willing to purchase it then it doesn't matter if 'experts' think it has no value it will go up regardless if they're happy with paying that price in paper money. When it comes to altcoins I have noticed a definite trend though more than in Bitcoin of difficulty affecting price but when a coin gets popular then obviously people will buy into it regardless of the difficulty and of course the hashing power that you have on the network is directly tied to how much or how fast the difficulty rises depending on the rules the altcoin follows.
Yes. Since difficulty directly affects the possible amount of bitcoin supply by definition, I thought it might be reasonable to indicate bitcoin's current value looking at the provided graph. On the other hand, there are numerous factors that affect the demand. It might be harder to indicate whether bitcoin is overvalued just by trying to assume whether the demand will increase.
Difficulty definitely affects how difficult it is to get Bitcoin through mining but the thing you have to bear in mind is that the laws of supply and demand always apply here, if people are willing to purchase it then it doesn't matter if 'experts' think it has no value it will go up regardless if they're happy with paying that price in paper money. When it comes to altcoins I have noticed a definite trend though more than in Bitcoin of difficulty affecting price but when a coin gets popular then obviously people will buy into it regardless of the difficulty and of course the hashing power that you have on the network is directly tied to how much or how fast the difficulty rises depending on the rules the altcoin follows.
one thing is for sure, the difficult is directly proportional to the price of bitcoin
Do you think it is reasonable to indicate whether bitcoin is overpriced from studying this graph?
Based on graph, Bitcoin price is highly undervalued
You're looking at the wrong graph. Look at price vs. difficulty/price graph.
Do you think it is reasonable to indicate whether bitcoin is overpriced from studying this graph?
Based on graph, Bitcoin price is highly undervalued
To better investigate the relationship between Bitcoin price and difficulty, I made the following interactive graph.
Live graph: http://bitcointrends.herokuapp.com/
https://s3.amazonaws.com/bitcointrends/graphcaptured.PNG
https://s3.amazonaws.com/bitcointrends/ratiograph.PNG
It seems there's a direct correlation (as expected) between Bitcoin price and difficulty. I assumed that difficulty is one of the
biggest factors that affects bitcoin's price, and the graphs seems to support this assumption. What's more interesting is the graph
that compares price and difficulty/price. Do you think it is reasonable to indicate whether bitcoin is overpriced from studying this graph?
Live graph: http://bitcointrends.herokuapp.com/
https://s3.amazonaws.com/bitcointrends/graphcaptured.PNG
https://s3.amazonaws.com/bitcointrends/ratiograph.PNG
It seems there's a direct correlation (as expected) between Bitcoin price and difficulty. I assumed that difficulty is one of the
biggest factors that affects bitcoin's price, and the graphs seems to support this assumption. What's more interesting is the graph
that compares price and difficulty/price. Do you think it is reasonable to indicate whether bitcoin is overpriced from studying this graph?
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