Theres been a price drop since the new period of readjustment. I expect a price drop with high difficulty but the price has continued to declined following days after which I am left wondering why when difficulty is looking to be neutral for the next period. Very hard market to buy hash on the market, any clues as to why there is so much decline?
The market has never been, is not now, and will not be rational. You have kids with no knowledge of trading strategies buying and selling hash on top of tons of people who don't fully understand what the underlying asset is. Just look back a few pages, there are posts upon posts of people with no knowledge of what they are buying asking questions. Those same individuals will soon realize they bought at the wrong time and try to sell to recoup their losses.
Its really not hard to value these assets. Look at what each of the hash types will make at different difficulty adjustments, then decide which average difficulty jump you think is right. If the total amount made is over the price of the hash, DO NOT BUY. Its a really simply concept, and yet, there are tons of people who continue to buy. And don't tell me the units have underlying value also. If your plan is to try and sell these at a profit, then your still not understanding the underlying asset and if you think these will have a residual value, take a look at when the S3 and S2 went away. It was costing so much money to get these shipped out, that it wasn't even worth it. These are only worth what they will mine minus maintenance costs until they are no longer profitable.
Thanks for the reply. The fact that the market is not rational really helps to make a lot more sense out of the trading action. It's too bad there are so many people lacking basic economics to understand how this market works. It seems simple to me, it's just a deprecating asset that pays dividends and to make profit you just have to simply earn more dividends than the asset depreciates over a certain length of time. So with irrational declines someone would only have the choice of holding the hash in hopes the market goes back up to re-enter the profit territory at which there is a risk of high readjustment which will cause a rational decline and possibly irrational panic sells by people.
Pretty dangerous market to dabble in and I can see how bitmain makes profit at this being they sell their miners at a high cost in the first place, the maintenance fee, trade fee, handling fee if they ship it out at redemption and then they keep what ever coin is left over when that miner goes off the market. Meanwhile while the miner is online noob traders short themselves to death.
