Topic: Question For Bitcoin OldTimers - page 2. (Read 4021 times)
i would say that the 2016 halving is definitely not priced in yet.
Priced in or not, there is going to be half of daily supply than before.
As long as other fundamentals are similar, that has to lead to price rise sooner or later. It's only the question where the price will be at that point. Maybe we will be at 100$ and halving to cause us go to 200.
As long as other fundamentals are similar, that has to lead to price rise sooner or later. It's only the question where the price will be at that point. Maybe we will be at 100$ and halving to cause us go to 200.
My theory is that it was the reason for the rally in 2013. My model is following - overall there is a balance between the money that flows into bitcoin world and the BTC produced - the halving disturbed that balance. The effect was not immediate - because there is some stickiness in the price (the mechanism for that sticiness is quite complex - but it includes 'pricing in the effect' and also standard 'getting used to the price') - but over a few months the imbalance grew so much that it suddenly broke that stickiness and bubbled in the rally. Pricing in is probably not so efficient when you have something that accumulates over time - instead of a one-time event.
exactly. the expected supply shortage was probably "priced in" by the time halving happened, but that pricing in process (people hoarding coins and sitting on them waiting for future growth) also have led to growing imbalance in supply-demand resulting in a closed feedback loop which unrolled during 2013.
i.e. the market's pricing in have seriously underestimated the effect of the halving together with higher demand. maybe next time it will be different.
Next time won't be different. Traders will expect again that it is priced in. But it isn't.
This really is a great question! Even if the halving is already priced in to a big extent (since it's in Bitcoins DNA so to say, after all) the amount of coins being put into circulation goes down significantly and I do believe it is, at least, an accelerator for an increase in price!
Halving was already priced in to the exchange rate by speculators -- so it occurring didn't cause a shock.
Halving was not really considered by most miners. Many of them were pretty surprised to see their yield drop (in terms of XBTs) by half. Some of these miners had bought mining hardware because buying at an exchange was difficult, at best. So when the returns (in terms of XBTs) dropped there was some buying pressure once they discovered that methods available from the exchanges had improved.
Now that a much greater part of the world has exchanges, that buying pressure from the miners that came with the first halving won't repeat for the second halving.
Since many miners sell much of their bitcoin revenues, this next halving will likely have a bigger impact on liquidity after the halving occurs than the first one did, IMO. i.e., the loss of supply of $50K /day (calculated as 3,600 XBT/day at $14 each) had a lot less impact than will $1 million/day (calculated as 1,800/day at $555 each, or whatever it will be then).
Halving was not really considered by most miners. Many of them were pretty surprised to see their yield drop (in terms of XBTs) by half. Some of these miners had bought mining hardware because buying at an exchange was difficult, at best. So when the returns (in terms of XBTs) dropped there was some buying pressure once they discovered that methods available from the exchanges had improved.
Now that a much greater part of the world has exchanges, that buying pressure from the miners that came with the first halving won't repeat for the second halving.
Since many miners sell much of their bitcoin revenues, this next halving will likely have a bigger impact on liquidity after the halving occurs than the first one did, IMO. i.e., the loss of supply of $50K /day (calculated as 3,600 XBT/day at $14 each) had a lot less impact than will $1 million/day (calculated as 1,800/day at $555 each, or whatever it will be then).
It will all depend on market price but relative to the total supply going from 50 to 25 was a lot bigger than from 25 to 12.5. The amount of coins that will be mined less will be halve and the outstanding Bitcoin base has only grown since then.
Halving was already priced in to the exchange rate by speculators -- so it occurring didn't cause a shock.
Halving was not really considered by most miners. Many of them were pretty surprised to see their yield drop (in terms of XBTs) by half. Some of these miners had bought mining hardware because buying at an exchange was difficult, at best. So when the returns (in terms of XBTs) dropped there was some buying pressure once they discovered that methods available from the exchanges had improved.
Now that a much greater part of the world has exchanges, that buying pressure from the miners that came with the first halving won't repeat for the second halving.
Since many miners sell much of their bitcoin revenues, this next halving will likely have a bigger impact on liquidity after the halving occurs than the first one did, IMO. i.e., the loss of supply of $50K /day (calculated as 3,600 XBT/day at $14 each) had a lot less impact than will $1 million/day (calculated as 1,800/day at $555 each, or whatever it will be then).
Halving was not really considered by most miners. Many of them were pretty surprised to see their yield drop (in terms of XBTs) by half. Some of these miners had bought mining hardware because buying at an exchange was difficult, at best. So when the returns (in terms of XBTs) dropped there was some buying pressure once they discovered that methods available from the exchanges had improved.
Now that a much greater part of the world has exchanges, that buying pressure from the miners that came with the first halving won't repeat for the second halving.
Since many miners sell much of their bitcoin revenues, this next halving will likely have a bigger impact on liquidity after the halving occurs than the first one did, IMO. i.e., the loss of supply of $50K /day (calculated as 3,600 XBT/day at $14 each) had a lot less impact than will $1 million/day (calculated as 1,800/day at $555 each, or whatever it will be then).
Another way of looking at this is that because everyone knows it's going to happen beginning way back in 2009 and when, then the entire price rise from then until now should be a smooth linear rise. That clearly isn't the case. It's been punctuated by ramps and crashes with long periods of consolidation in between.
Point being, somewhere around the next halving, volatility is going to increase.
Point being, somewhere around the next halving, volatility is going to increase.
If the price do not double, then half of the network hash rate going to disappear over the weeks as the inefficient miners can not even cover the electricity cost.
Since people have mining contracts they can't just stop....
Hopefully supply will stagnate and price will rise due to scaricity
Another way of looking at this is that because everyone knows it's going to happen beginning way back in 2009 and when, then the entire price rise from then until now should be a smooth linear rise. That clearly isn't the case. It's been punctuated by ramps and crashes with long periods of consolidation in between.
Point being, somewhere around the next halving, volatility is going to increase.
Point being, somewhere around the next halving, volatility is going to increase.
If the price do not double, then half of the network hash rate going to disappear over the weeks as the inefficient miners can not even cover the electricity cost.
Another way of looking at this is that because everyone knows it's going to happen beginning way back in 2009 and when, then the entire price rise from then until now should be a smooth linear rise. That clearly isn't the case. It's been punctuated by ramps and crashes with long periods of consolidation in between.
Point being, somewhere around the next halving, volatility is going to increase.
Point being, somewhere around the next halving, volatility is going to increase.
Not an old timer.
The effect of dogecoin halving while price remain flat and downtrend cause the network difficulty to go down in half. I imagine bitcoin will have similar effect IF price doesn't go up while the reward cut in half.
The effect of dogecoin halving while price remain flat and downtrend cause the network difficulty to go down in half. I imagine bitcoin will have similar effect IF price doesn't go up while the reward cut in half.
It certainly had an effect last time around. However that could also be because people underestimated the effect of the halving of the daily supply. This time the halving may be incorporated in the price, or over-incorporated (making the price go down after the halving) or under-incorporated just as the first time (making the price go up afterwards). There's no way to tell for sure except with heinsight 
This:
exactly. the expected supply shortage was probably "priced in" by the time halving happened, but that pricing in process (people hoarding coins and sitting on them waiting for future growth) also have led to growing imbalance in supply-demand resulting in a closed feedback loop which unrolled during 2013.
i.e. the market's pricing in have seriously underestimated the effect of the halving together with higher demand. maybe next time it will be different.
and this:
i disagree. it definitely had an effect. it's just a matter of how one defines when it kicked in.
just b/c we know we have all these halvings in front of us doesn't mean they get priced in today. imo,there wasn't any effect until around 6 mo before the last halving (it was Nov 2012, right?). the forward looking pricing-in effect is offset by the never ending threat of the death of Bitcoin or a gvt-led 51% attack that will wipe out the network at any moment. also like Chris said above, the fear that something might go wrong at the time of the halving. as time gets nearer, ppl get more confident and antsie to make a front running move, which i think was about 6 mo prior to last one. after it went off w/o a hitch, the price skyrocketed to 260 or so in April 2013.
of course, the next time will be different.
My theory is that it was the reason for the rally in 2013. My model is following - overall there is a balance between the money that flows into bitcoin world and the BTC produced - the halving disturbed that balance. The effect was not immediate - because there is some stickiness in the price (the mechanism for that sticiness is quite complex - but it includes 'pricing in the effect' and also standard 'getting used to the price') - but over a few months the imbalance grew so much that it suddenly broke that stickiness and bubbled in the rally. Pricing in is probably not so efficient when you have something that accumulates over time - instead of a one-time event.
exactly. the expected supply shortage was probably "priced in" by the time halving happened, but that pricing in process (people hoarding coins and sitting on them waiting for future growth) also have led to growing imbalance in supply-demand resulting in a closed feedback loop which unrolled during 2013.
i.e. the market's pricing in have seriously underestimated the effect of the halving together with higher demand. maybe next time it will be different.
and this:
Wow - so every response so far is in agreement didnt have that much of an impact. And that the bubbles that started in 2013 were absolutely not related.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
While I think its more measurable to see that the price might not run up to a halving, I think its less measurable to see the effects of halving 3-12 months down the road. Especially with the gargantuan hashrate we have now that could be even more extreme in 2 years.
Maybe I'm crazy, but it seems that at least the last bubble was caused by a literal lack of supply. There were times in the runup where Chinese exchanges literally ran out of coins. I would think that a halving would have a potential effect here.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
While I think its more measurable to see that the price might not run up to a halving, I think its less measurable to see the effects of halving 3-12 months down the road. Especially with the gargantuan hashrate we have now that could be even more extreme in 2 years.
Maybe I'm crazy, but it seems that at least the last bubble was caused by a literal lack of supply. There were times in the runup where Chinese exchanges literally ran out of coins. I would think that a halving would have a potential effect here.
i disagree. it definitely had an effect. it's just a matter of how one defines when it kicked in.
just b/c we know we have all these halvings in front of us doesn't mean they get priced in today. imo,there wasn't any effect until around 6 mo before the last halving (it was Nov 2012, right?). the forward looking pricing-in effect is offset by the never ending threat of the death of Bitcoin or a gvt-led 51% attack that will wipe out the network at any moment. also like Chris said above, the fear that something might go wrong at the time of the halving. as time gets nearer, ppl get more confident and antsie to make a front running move, which i think was about 6 mo prior to last one. after it went off w/o a hitch, the price skyrocketed to 260 or so in April 2013.
of course, the next time will be different.
My theory is that it was the reason for the rally in 2013. My model is following - overall there is a balance between the money that flows into bitcoin world and the BTC produced - the halving disturbed that balance. The effect was not immediate - because there is some stickiness in the price (the mechanism for that sticiness is quite complex - but it includes 'pricing in the effect' and also standard 'getting used to the price') - but over a few months the imbalance grew so much that it suddenly broke that stickiness and bubbled in the rally. Pricing in is probably not so efficient when you have something that accumulates over time - instead of a one-time event.
exactly. the expected supply shortage was probably "priced in" by the time halving happened, but that pricing in process (people hoarding coins and sitting on them waiting for future growth) also have led to growing imbalance in supply-demand resulting in a closed feedback loop which unrolled during 2013.
i.e. the market's pricing in have seriously underestimated the effect of the halving together with higher demand. maybe next time it will be different.
My theory is that it was the reason for the rally in 2013. My model is following - overall there is a balance between the money that flows into bitcoin world and the BTC produced - the halving disturbed that balance. The effect was not immediate - because there is some stickiness in the price (the mechanism for that sticiness is quite complex - but it includes 'pricing in the effect' and also standard 'getting used to the price') - but over a few months the imbalance grew so much that it suddenly broke that stickiness and bubbled in the rally. Pricing in is probably not so efficient when you have something that accumulates over time - instead of a one-time event.
Wow - so every response so far is in agreement didnt have that much of an impact. And that the bubbles that started in 2013 were absolutely not related.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
If everyone knows there will be a future squeeze on supply, you don't think that gets priced in early? It inevitably results in diminished supply (obviously), but the % of mined coins brought to market is so miniscule as it is already. You think it would just cut that in half? I don't think so. Lots of hoarded coins waiting to fill the gaps.
Well if the consensus is there is no effect, then what does that tell us?
The bottom line is I dont subscribe to the notion that most of the people trading/buying/selling bitcoin have the slightest clue about what "priced in" even looks like. Quite the opposite. I think most of these people do not.
Such is the reason I wanted to get opinions.
I don't think the consensus is there is no effect, rather that how and over what period are completely unknown. Regarding "priced in", perhaps you are right. But I also don't think anyone could point to a chart and say, "the halving caused the price to begin rising here."
Wow - so every response so far is in agreement didnt have that much of an impact. And that the bubbles that started in 2013 were absolutely not related.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
If everyone knows there will be a future squeeze on supply, you don't think that gets priced in early? It inevitably results in diminished supply (obviously), but the % of mined coins brought to market is so miniscule as it is already. You think it would just cut that in half? I don't think so. Lots of hoarded coins waiting to fill the gaps.
Well if the consensus is there is no effect, then what does that tell us?
The bottom line is I dont subscribe to the notion that most of the people trading/buying/selling bitcoin have the slightest clue about what "priced in" even looks like. Quite the opposite. I think most of these people do not.
Such is the reason I wanted to get opinions.
Wow - so every response so far is in agreement didnt have that much of an impact. And that the bubbles that started in 2013 were absolutely not related.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
Hmmm. So 1/2 the new bitcoins available on the open market and the effect is always priced in early and does not create supply issues backend.
If everyone knows there will be a future squeeze on supply, you don't think that gets priced in early? It inevitably results in diminished supply (obviously), but the % of mined coins brought to market is so miniscule as it is already. You think it would just cut that in half? I don't think so. Lots of hoarded coins waiting to fill the gaps.
Re: summer 2012 - I believe Pirate's ponzi was one of the causes for both price surge and crash.
Anticipation of Dec 2012's reward halving might indeed have been another cause of the rise from 5 to 10. It also caused the hash rate to flex a bit (because of last GPU miners quitting I suppose)... but after reward halving, the doom scenario did not happen. So new January 2013 money came in and met a smaller offer than their demand.
TLDR: I don't know.
Anticipation of Dec 2012's reward halving might indeed have been another cause of the rise from 5 to 10. It also caused the hash rate to flex a bit (because of last GPU miners quitting I suppose)... but after reward halving, the doom scenario did not happen. So new January 2013 money came in and met a smaller offer than their demand.
TLDR: I don't know.
I remember starting the newsletter in April 2012. I remember pleading with subs to buy all dips into the end of year in anticipation of halving. We were stuck between 4.5 and 5.4 for months until May when things started to get volatile in an upward direction, first to 15.5. I don't remember any specific news around them that would account for an immediate effect like that on the price.
I got interested in Bitcoin around the end of 2012, around the time of the block halving.
I've always attributed the block halving to that rise from $13 to $266 (although now I know many other factors were at work)
I've always attributed the block halving to that rise from $13 to $266 (although now I know many other factors were at work)
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