Every day X bitcoins are converted into Y units of fiat. The bitcoin price is Y/X.
I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.
Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?
Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.
Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?
I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.
Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?
Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.
Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?
I would think that the supply from merchants is the greatest. There are many merchants that simply want to get a larger market share accept BTC. Even Overstock only keeps 10% of the BTC that they receive from sales.
Investors obviously believe in BTC, and would carry some of the supply, however most investors only entered the market relatively recently and may not wish to cash out until they receive greater returns.
Miners obviously believe in BTC at least somewhat if they had invested in their machines. I have met a number of miners that have wanted to keep their bitcoin in bitcoin simply because they believe in it.
One source that you forgot is people who wanted to buy something in bitcoin but still have some left over.
Agreed. Merchants followed investors and then miners. The investors because they trade currency for it coin constantly and miners to pay their electricity bill.
I would be interested to see how this changes as bitcoin is adopted by more of the general public.
