Is there evidence that there is a correlation between difficulty and price?
No 1 open excel
2 take the price on mtgox since day one
3 take the diff since mtgox did open
4 plot a chart with price and diff in % change not value
Topic: Is there evidence that there is a correlation between difficulty and price? - page 2. (Read 2628 times)
October 14, 2012, 12:06:48 AM
1 open excel
2 take the price on mtgox since day one
3 take the diff since mtgox did open
4 plot a chart with price and diff in % change not value
October 14, 2012, 12:03:32 AM
Is there evidence that there is a correlation between difficulty and price?
No 
October 13, 2012, 06:36:59 PM
And if so why do you think that is? What causes demand to go up? Supply stays more or less consistent from mining until the reward is halved. So I'm a little unclear on this.
I suspect your question is not really about correlation. You can look at the graphs of price and difficulty and the correlation is obvious.
Perhaps what you really want ask is "Does difficulty affect price?"
I don't think it does, at least not directly. I don't think anyone has come up with a good reason why it would. On the other hand, it could said be that as the difficulty goes up (or the reward goes down) the number of people mining will go down. Some of them might lose interest and that will result in a lower demand for bitcoins.
Supply stays more or less consistent from mining until the reward is halved.
The supply of BTC for sale continues to rise because mining increases the general amount of BTC. The amount of BTC sold on MtGox is 10 times the total amount of BTC being mined, so I don't think that halving the reward will make a noticeable difference in the supply of BTC for sale.
October 13, 2012, 06:04:32 PM
Is there evidence that there is a correlation between difficulty and price?
No October 13, 2012, 05:14:51 PM
And if so why do you think that is? What causes demand to go up? Supply stays more or less consistent from mining until the reward is halved. So I'm a little unclear on this.
When price is high compared to difficulty, miners invest in more equipment and difficulty goes up. When price is low and difficulty high, mining becomes unprofitable for many miners. They stop mining to save electricity, and difficulty goes down. October 13, 2012, 05:13:47 PM
I would expect there to be a correlation. As the price of BTC goes up, there will be more miners, and thus higher difficulty.
October 13, 2012, 05:08:49 PM
And if so why do you think that is? What causes demand to go up? Supply stays more or less consistent from mining until the reward is halved. So I'm a little unclear on this.
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