My theory is proving true once again

dropt

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Quote from: kokojie on August 18, 2014, 09:35:26 AM

I have trouble believing vast majority of miners are not selling for fiat immediately, because if a miner is not converting to fiat, then he's just paying facility/electricity/equipment cost out of pocket, then he's essentially buying BTC with fiat. He could have just bought BTC on an exchange if he wanted to buy BTC with fiat.

Vast majority are (IMO) selling, because the vast majority are the corporate mines that aren't interested in BTC as a technology (holding). They're interested in making millions of fiat dollars. As for the indies, I keep most every coin I mine and pay my expenses out of pocket. Why you may ask? Probably because every coin I mine has a cost basis of <$200. Can't get those on the exchange.

knocte

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Quote from: kokojie on August 18, 2014, 09:35:26 AM

I have trouble believing vast majority of miners are not selling for fiat immediately, because if a miner is not converting to fiat, then he's just paying facility/electricity/equipment cost out of pocket, then he's essentially buying BTC with fiat. He could have just bought BTC on an exchange if he wanted to buy BTC with fiat.

I think they are selling to cover their costs, sure, but I don't believe they are selling every bitcoin they make.

kokojie

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Quote from: knocte on August 18, 2014, 09:08:47 AM

Quote from: kokojie on August 18, 2014, 08:55:28 AM

I think the other factor to keep in mind is that Bitcoin is still wildly inflationary, much more so than USD.

Each day 3200+ coins are minted, and at $500 price tag, requires $1.6M new money to enter the Bitcoin economy, every single day, just to maintain the $500 price tag.

When less than $1.6M enters, price -> fall. Until a new equilibrium is reached.

On the other hand, if more than $1.6M enters each day, then price will rise.

That's a good point.

But there's also 2 things on top of that:
1) If less than 1.6M of bitcoin is bought in a day, it doesn't automatically mean that prices go down. Because all bitcoin miners don't sell their new minted coins right away. Many of them just hold them.
2) When next halving occurs, it will be 0.8M, much less. So this means that the more halving events we have, the quicker the price will start going up in the future.

I have trouble believing vast majority of miners are not selling for fiat immediately, because if a miner is not converting to fiat, then he's just paying facility/electricity/equipment cost out of pocket, then he's essentially buying BTC with fiat. He could have just bought BTC on an exchange if he wanted to buy BTC with fiat.

I agree on the halving speculation. The last halving happened on 2012.11.28, price was at $10, and then price went up very significantly. Price doubled by January, 3x in February, 5x in March, and 20x in April. The price went to over 100x by December.

spazzdla

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This is why I refuse to buy unless they hold at min 10% of the purchase and even then I tend to want 50% or it's a no buy.

knocte

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Quote from: kokojie on August 18, 2014, 08:55:28 AM

I think the other factor to keep in mind is that Bitcoin is still wildly inflationary, much more so than USD.

Each day 3200+ coins are minted, and at $500 price tag, requires $1.6M new money to enter the Bitcoin economy, every single day, just to maintain the $500 price tag.

When less than $1.6M enters, price -> fall. Until a new equilibrium is reached.

On the other hand, if more than $1.6M enters each day, then price will rise.

That's a good point.

But there's also 2 things on top of that:
1) If less than 1.6M of bitcoin is bought in a day, it doesn't automatically mean that prices go down. Because all bitcoin miners don't sell their new minted coins right away. Many of them just hold them.
2) When next halving occurs, it will be 0.8M, much less. So this means that the more halving events we have, the quicker the price will start going up in the future.

kokojie

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I think the other factor to keep in mind is that Bitcoin is still wildly inflationary, much more so than USD.

Each day 3200+ coins are minted, and at $500 price tag, requires $1.6M new money to enter the Bitcoin economy, every single day, just to maintain the $500 price tag.

When less than $1.6M enters, price -> fall. Until a new equilibrium is reached.

On the other hand, if more than $1.6M enters each day, then price will rise.

Benjig

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Quote from: kokojie on August 01, 2014, 01:19:20 PM

Well, looks like the initial short term drop is over? price is creeping up, maybe the retailers are not converting much to fiat now since the initial rush to spend is gone.

i think the actual downtrend to 560 we just had , wasnt for merchants converting bitcoins to fiat, but for the ethereum ipo, those are who are selling good part of the btcs they are receiving.

ensurance982

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Trust me!

Quote from: kokojie on July 24, 2014, 08:11:33 AM

I had a theory that major retailer acceptance has a short term DOWN effect on the price. Because when a major retailer announce acceptance, old coin holders rush to spend some bitcoin to support that retailer, often creating millions of dollars of transaction volume in a few days, and all these bitcoin will be converted to fiat by the retailer, creating sell pressure, for the short term.

Do you really think the selling pressure really manifests itself that quickly? Why would traders buy on the news then? I think companies that liquidate through BitPay or so aren't creating a lot of pressure since BitPay has buyers that buy the BTC they get on a contract basis, AFAIK...

maker88

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Quote from: gogxmagog on August 03, 2014, 02:53:14 PM

this will be a greater challenge for sure, but getting the tax man, utilities, the supply chain etc. to accept would be a good way to keep the btc flowing and negate most of the need to cash it out.

in some european country(netherlands? belgium? can't recall) i heard you can pay taxes in bitcoin, but likely the host country immediately converts to their currency. if i could pay my utilities in bitcoin then i wouldn't even have a bank account except to accept fiat payments from employers and convert spare fiat into bitcoins lol.

giveBTCpls

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Retailers seem like a double edged sword to me. They say "ohh yeah, we support Bitcoin" and so on, but then they act as Bitcoin dumping machines as they convert all of their gains to fiat.

gogxmagog

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Ad maiora!

so getting retailers to accept btc is not the complete goal then. We need the infrastructure surrounding retail to accept btc. this will be a greater challenge for sure, but getting the tax man, utilities, the supply chain etc. to accept would be a good way to keep the btc flowing and negate most of the need to cash it out. Maybe over simplified view here, but pretty much right after I heard about btc, and saw the crazy volatility, I decided that the best case scenario would be to get btc, hodl, wait until I could use it as easily and universally as fiat, at which time it would have an exponentially greater purchasing power. The btc to fiat conversion model would become obsolete if adoption was absolute. Could be some time till we see that though.

CoinsCoinsEverywhere

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Quote from: keithers on August 02, 2014, 04:15:42 AM

This would only apply if you are assuming that all BTC spent at the new company that accepts BTC are spending coins that they have been holding onto. If they need to buy BTC to spend, then the more people soing so would drive the price up

Could you please explain to me why this would be true? If people are buying bitcoins to spend immediately, then their net effect on the market is pretty much price neutral. Someone buys bitcoin and the price ticks up, then they spend it and the merchant sells it, and the price ticks down (if the quantity is large enough).

keithers

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Quote from: kokojie on July 28, 2014, 08:21:53 AM

I guess Dell is still mass converting to fiat from their 10% off Bitcoin sale.

Do you have any market data that depicts this?

keithers

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This is the land of wolves now & you're not a wolf

This would only apply if you are assuming that all BTC spent at the new company that accepts BTC are spending coins that they have been holding onto. If they need to buy BTC to spend, then the more people soing so would drive the price up

CoinsCoinsEverywhere

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Quote from: kokojie on August 01, 2014, 01:19:20 PM

Well, looks like the initial short term drop is over? price is creeping up, maybe the retailers are not converting much to fiat now since the initial rush to spend is gone.

If we can hold 600 for a while, then I'd say yes. Argentina's default a couple days ago may also be playing a role. Now we just need to break 685....

kokojie

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Well, looks like the initial short term drop is over? price is creeping up, maybe the retailers are not converting much to fiat now since the initial rush to spend is gone.

kokojie

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I guess Dell is still mass converting to fiat from their 10% off Bitcoin sale.

kokojie

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Quote from: An amorous cow-herder on July 26, 2014, 05:18:33 AM

Quote from: BusyBeaverHP on July 26, 2014, 02:02:06 AM

Dell and Newegg offers 10% off with bitcoin purchases. That pretty much beats any fees incurred from purchasing bitcoins and create incentive for a closed-loop bitcoin economy.

Those are limited time promotional offers. Only for Alienware with Dell, and lets just check Newegg for a moment.

*Offer expires July 31, 2014 at 11:59PM PT. Offer valid while funds and/or supplies last.
Does not include Newegg Promotional Gift Cards, Marketplace or Open Box items.
Cannot be combined with other promo codes, or promotions that include a free gift.
Total discount limited to $100. Enter promo code: BITCOIN at checkout.
Discount not applicable to taxes or shipping.
Discount is applied before taxes and shipping are calculated.
Offer is only valid for purchases made using bitcoin. By using the promo code,
you consent to receive additional deals and promotions through our e-mail newsletter.
Limit one discount per customer.

All prices reflect the final price after savings/rebate(s). Offers expire 07/31/2014 at 11:59 P.M. PT.

Especially the "Cannot be combined with other promo codes part".
Is that Bitcoin promo really better than would you could get for Alienware or Newegg anyway?

I found that during the Bitcoin promotion at newegg, everything I wanted to buy was 5%-10% cheaper at amazon...

CoinsCoinsEverywhere

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Quote from: An amorous cow-herder on July 26, 2014, 05:18:33 AM

Quote from: BusyBeaverHP on July 26, 2014, 02:02:06 AM

Dell and Newegg offers 10% off with bitcoin purchases. That pretty much beats any fees incurred from purchasing bitcoins and create incentive for a closed-loop bitcoin economy.

Those are limited time promotional offers. Only for Alienware with Dell, and lets just check Newegg for a moment.

*Offer expires July 31, 2014 at 11:59PM PT. Offer valid while funds and/or supplies last.
Does not include Newegg Promotional Gift Cards, Marketplace or Open Box items.
Cannot be combined with other promo codes, or promotions that include a free gift.
Total discount limited to $100. Enter promo code: BITCOIN at checkout.
Discount not applicable to taxes or shipping.
Discount is applied before taxes and shipping are calculated.
Offer is only valid for purchases made using bitcoin. By using the promo code,
you consent to receive additional deals and promotions through our e-mail newsletter.
Limit one discount per customer.

All prices reflect the final price after savings/rebate(s). Offers expire 07/31/2014 at 11:59 P.M. PT.

Especially the "Cannot be combined with other promo codes part".
Is that Bitcoin promo really better than would you could get for Alienware or Newegg anyway?

While I agree that in the short term these promos aren't going to help the price of bitcoin much, it does raise awareness and get people to try it. If nothing else, it's a step in the right direction.

An amorous cow-herder

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Quote from: BusyBeaverHP on July 26, 2014, 02:02:06 AM

Dell and Newegg offers 10% off with bitcoin purchases. That pretty much beats any fees incurred from purchasing bitcoins and create incentive for a closed-loop bitcoin economy.

Those are limited time promotional offers. Only for Alienware with Dell, and lets just check Newegg for a moment.

*Offer expires July 31, 2014 at 11:59PM PT. Offer valid while funds and/or supplies last.
Does not include Newegg Promotional Gift Cards, Marketplace or Open Box items.
Cannot be combined with other promo codes, or promotions that include a free gift.
Total discount limited to $100. Enter promo code: BITCOIN at checkout.
Discount not applicable to taxes or shipping.
Discount is applied before taxes and shipping are calculated.
Offer is only valid for purchases made using bitcoin. By using the promo code,
you consent to receive additional deals and promotions through our e-mail newsletter.
Limit one discount per customer.

All prices reflect the final price after savings/rebate(s). Offers expire 07/31/2014 at 11:59 P.M. PT.

Especially the "Cannot be combined with other promo codes part".
Is that Bitcoin promo really better than would you could get for Alienware or Newegg anyway?

Topic: My theory is proving true once again (Read 5894 times)