Topic: Medium term forecast for US$ / BTC price. - page 2. (Read 2419 times)
I'd prefer stability than a drop, tbh. I bought an ASIC with my own money, I plan on holding the BTC for a while, then again it was just ~$2000 dollars.
There will be no increase in blocks solved.
Yes, there will.
There will be no increase in blocks solved.
After a number of posts about expected Avalon ASIC earnings I realised that in the medium term - within a month or two - the US$ / BTC price is likely to fall, or at best level out. This has nothing to do with market players or bubbles, and everything to do with mining.
1. When a constant increase in network hashrate occurs, difficulty retargets cannot completely negate the increased number of blocks solved.
For example, in the chart below (estimated increase in hashrate from various sources) by July this year the expected blocks per hour for the last retarget is ~ 160 blocks per day.
A constant increase in blocks solved will increase supply substantially, and since these devices are electricity efficient the increase in network hashrate is mostly limited by the cost of ASIC devices - so we can expect the increase in network hashrate to continue for significantly longer than a few months.
2. Since the cost of the device is a limiting factor and in the short term a higher device hashrate will lead to significantly larger earnings, many miners will pay much more for a hashing device than they would have for a GPU last year.
This means that many miners will obtain investors or bank loans in order to purchase, for example, a mini rig, when they might have been previously satisfied with a few gpus. These larger hashrate owners will need fiat currency to pay for electricity - which although small compared to the near term btc earnings will still be a substantial sum. If miners have taken loans and investors they will need fiat currency to pay for bank loans and reimburse any investors who want to be paid in fiat.
Smaller hashrate miners who may have purchased their device with their own cash and can afford to pay for electricity using other revenue sources may hold on to their btc, but based on other analyses I've done (unpublished) I estimate that as was the case prior to ASICs, the top 20% of hashrate owners will account for 80% of the network. Smaller miners that hold btc will affect the price less since their total btc holdings will be smaller.
The over-supply of coins in point 1 will be exacerbated by larger hashrate miners regularly selling a large proportion of their btc earnings.
tl;dr In the coming months, the price is more likely to drop or stabilise than continue to increase. If you are purchasing a high cost ASIC it would be best to assume lower USD BTC prices rather than higher.
1. When a constant increase in network hashrate occurs, difficulty retargets cannot completely negate the increased number of blocks solved.
For example, in the chart below (estimated increase in hashrate from various sources) by July this year the expected blocks per hour for the last retarget is ~ 160 blocks per day.
A constant increase in blocks solved will increase supply substantially, and since these devices are electricity efficient the increase in network hashrate is mostly limited by the cost of ASIC devices - so we can expect the increase in network hashrate to continue for significantly longer than a few months.
2. Since the cost of the device is a limiting factor and in the short term a higher device hashrate will lead to significantly larger earnings, many miners will pay much more for a hashing device than they would have for a GPU last year.
This means that many miners will obtain investors or bank loans in order to purchase, for example, a mini rig, when they might have been previously satisfied with a few gpus. These larger hashrate owners will need fiat currency to pay for electricity - which although small compared to the near term btc earnings will still be a substantial sum. If miners have taken loans and investors they will need fiat currency to pay for bank loans and reimburse any investors who want to be paid in fiat.
Smaller hashrate miners who may have purchased their device with their own cash and can afford to pay for electricity using other revenue sources may hold on to their btc, but based on other analyses I've done (unpublished) I estimate that as was the case prior to ASICs, the top 20% of hashrate owners will account for 80% of the network. Smaller miners that hold btc will affect the price less since their total btc holdings will be smaller.
The over-supply of coins in point 1 will be exacerbated by larger hashrate miners regularly selling a large proportion of their btc earnings.
tl;dr In the coming months, the price is more likely to drop or stabilise than continue to increase. If you are purchasing a high cost ASIC it would be best to assume lower USD BTC prices rather than higher.
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