Any btc price prediction should be taken with a grain of salt.
Is it possible? Yes
Probable? Maybe, if this decline is structurally similar to $250 to $70 decline in the summer of 2013.
Bitmain and Innosilicon (competitor) are producing vast amounts of mining machines and people are buying (so far).
Right now when mining at a cost of 10c/kwh, breakeven point is somewhere at $7000-8000/btc.
How likely would be a five-fold difficulty increase in 1.5-2 years?
Quite likely as it would take slightly less than 4% increase in difficulty per adjustment period (about 13 days).
last five adjustment periods were 6.91% on average.
last 10 adjustment periods were 5.7% on average.
With 5.7% adjustment per 13 day period in the next 1.5 years, btc price would have to be $70000-80000/btc for miners to break even when mining at the end of that period (end of 2019, early 2020).
Is it possible? Yes
Probable? Maybe, if this decline is structurally similar to $250 to $70 decline in the summer of 2013.
Bitmain and Innosilicon (competitor) are producing vast amounts of mining machines and people are buying (so far).
Right now when mining at a cost of 10c/kwh, breakeven point is somewhere at $7000-8000/btc.
How likely would be a five-fold difficulty increase in 1.5-2 years?
Quite likely as it would take slightly less than 4% increase in difficulty per adjustment period (about 13 days).
last five adjustment periods were 6.91% on average.
last 10 adjustment periods were 5.7% on average.
With 5.7% adjustment per 13 day period in the next 1.5 years, btc price would have to be $70000-80000/btc for miners to break even when mining at the end of that period (end of 2019, early 2020).
These are excellent points. I also did a similiar calculation a while ago and realized that btc was not profitable to mine while around 6k. I noticed very few people make an effort and do this kind of analysis. Like you said earlier, people are lost in their emotions instead of keeping a rational outlook or dig a little deeper to understand the costs of mining. Based on that the 60k projection appears suddenly not so outlandish any more.
I see the logic of extrapolating from current profitability, but I don't think it's correct, because it assumes constant bid-side demand.
It doesn't matter what it costs to produce BTC; it only matters what the market is willing to pay for it. If the market isn't willing to pay $60,000 or $80,000 on the above timeline, then difficulty will simply drop. Perhaps it will even plummet in a death spiral.
Miners aren't guaranteed profitability by any means. Marginal miners are constantly getting squeezed out of the market, and if there is a reversal in the general trend, there could be a blood bath of miners shutting down. This is all totally unpredictable.
This is what I'm thinking as well. There isn't a logical extrapolation from past prices because the demand can't be predicted using the same patterns. How do we know that there will still be such a demand for the coin in the future after such a big orgasmic speculative burst last winter? Maybe the people who got hurt told all their friends to stay away from bitcoin and no one's gonna come back. Or maybe hedge funds are piling on their shorts and hoping the rocket will run out of fuel. Or, maybe it will go back up again.
Miners are going to be in even more trouble when the next halvening comes around.
