Topic: the real, actual, true, accurate reason the price dropped - page 2. (Read 3178 times)
Yup, its all jam now
Quote
long term speculators should have very little to do with the value of any currency, including bitcoins. The value of the currency will be driven by the demand for goods in the bitcoin economy by those outside the bitcoin community (exports) verses the demand for goods outside the bitcoin economy by those inside it (imports). I see imports to be drastically higher than exports; therefore, prices will fall until imports and exports equalize.
Exactly. If you buy or mine BTC to sit on them, you basically don't count because those BTC aren't going to be bought or sold and won't affect the price until you do so. The golden rule you outlined is true too. Speculators, miners, and all investors can do whatever they want without affecting the price more than one simple fact: if more BTC are desired by all users to be spent on goods and services than are being created or are available for purchase, the price will go up. If more BTC are being created than are being desired for use in purchasing goods and services, then the price will go down because you'll have BTC for sale with no buyers.
The only oddity specific to this system is that if you want to buy a motherboard from my electronics sale post, I'm pricing it in USD and you're paying me with the BTC equivilant so it really doesn't matter what the BTC's exchange price is. Most vendors do it that way. That doesn't throw off the supply/demand rule outlined above too much except to amplify the changes in either direction. Basically, if people don't care what the price of BTC is because it's an intermediary payment method and they're really just using USD, the price can go way up or way down without people stopping buying it.
There is no reason to assume the opinion of suppliers should have a major impact on price at constant supply.
Sure, Bitcoin does indeed have a lot of small miners who might tend to sell at certain times rather than at others. But that is exactly where speculators come in, acting as a buffer against such fluctuations. Bitcoin has a massive amounts of speculators, their opinion should dwarf what miners decide about doing with a month's output.
A miner who decides to hold no matter what is nothing more than a speculator in the end. Whether he bought the coins at some price or the hardware for another makes little difference. Just like a speculator, some got the coins cheaper early. There is no time-frame in which an ending amortization time should cause more coins to be sold than at another time -- except immediately after a price rise, which obviously didn't happen much, given the speculative bubble we've seen in June. Had lots of people sold off mined coins when rising prices made their value met expenses for their hardware, the extreme price spike would probably not have happened.
Also, I find models focusing on mining increasingly useless, as the fraction of coins that have been recently mined grows smaller by the day. With over 7.2M BTC created, daily production is now falling below 0.1% of the existing coins. The relative fraction keeps diminishing, and they are shared among many small miners these days.
That said, I believe the statement to be false. Miner hardware amortization time may be important for difficulty, but is unimportant to price. Speculation is dominant, and thus the important part lies in the expectations of those holding or buying BTC.
PS: I find it bad practice to chain words like "real, actual, true, accurate" in a topic. Interestingly, such findings correlate well with false statements inside.
long term speculators should have very little to do with the value of any currency, including bitcoins. The value of the currency will be driven by the demand for goods in the bitcoin economy by those outside the bitcoin community (exports) verses the demand for goods outside the bitcoin economy by those inside it (imports). I see imports to be drastically higher than exports; therefore, prices will fall until imports and exports equalize. Sure, Bitcoin does indeed have a lot of small miners who might tend to sell at certain times rather than at others. But that is exactly where speculators come in, acting as a buffer against such fluctuations. Bitcoin has a massive amounts of speculators, their opinion should dwarf what miners decide about doing with a month's output.
A miner who decides to hold no matter what is nothing more than a speculator in the end. Whether he bought the coins at some price or the hardware for another makes little difference. Just like a speculator, some got the coins cheaper early. There is no time-frame in which an ending amortization time should cause more coins to be sold than at another time -- except immediately after a price rise, which obviously didn't happen much, given the speculative bubble we've seen in June. Had lots of people sold off mined coins when rising prices made their value met expenses for their hardware, the extreme price spike would probably not have happened.
Also, I find models focusing on mining increasingly useless, as the fraction of coins that have been recently mined grows smaller by the day. With over 7.2M BTC created, daily production is now falling below 0.1% of the existing coins. The relative fraction keeps diminishing, and they are shared among many small miners these days.
That said, I believe the statement to be false. Miner hardware amortization time may be important for difficulty, but is unimportant to price. Speculation is dominant, and thus the important part lies in the expectations of those holding or buying BTC.
PS: I find it bad practice to chain words like "real, actual, true, accurate" in a topic. Interestingly, such findings correlate well with false statements inside.
There is no reason to assume the opinion of suppliers should have a major impact on price at constant supply.
Sure, Bitcoin does indeed have a lot of small miners who might tend to sell at certain times rather than at others. But that is exactly where speculators come in, acting as a buffer against such fluctuations. Bitcoin has a massive amounts of speculators, their opinion should dwarf what miners decide about doing with a month's output.
A miner who decides to hold no matter what is nothing more than a speculator in the end. Whether he bought the coins at some price or the hardware for another makes little difference. Just like a speculator, some got the coins cheaper early. There is no time-frame in which an ending amortization time should cause more coins to be sold than at another time -- except immediately after a price rise, which obviously didn't happen much, given the speculative bubble we've seen in June. Had lots of people sold off mined coins when rising prices made their value met expenses for their hardware, the extreme price spike would probably not have happened.
Also, I find models focusing on mining increasingly useless, as the fraction of coins that have been recently mined grows smaller by the day. With over 7.2M BTC created, daily production is now falling below 0.1% of the existing coins. The relative fraction keeps diminishing, and they are shared among many small miners these days.
That said, I believe the statement to be false. Miner hardware amortization time may be important for difficulty, but is unimportant to price. Speculation is dominant, and thus the important part lies in the expectations of those holding or buying BTC.
PS: I find it bad practice to chain words like "real, actual, true, accurate" in a topic. Interestingly, such findings correlate well with false statements inside.
Sure, Bitcoin does indeed have a lot of small miners who might tend to sell at certain times rather than at others. But that is exactly where speculators come in, acting as a buffer against such fluctuations. Bitcoin has a massive amounts of speculators, their opinion should dwarf what miners decide about doing with a month's output.
A miner who decides to hold no matter what is nothing more than a speculator in the end. Whether he bought the coins at some price or the hardware for another makes little difference. Just like a speculator, some got the coins cheaper early. There is no time-frame in which an ending amortization time should cause more coins to be sold than at another time -- except immediately after a price rise, which obviously didn't happen much, given the speculative bubble we've seen in June. Had lots of people sold off mined coins when rising prices made their value met expenses for their hardware, the extreme price spike would probably not have happened.
Also, I find models focusing on mining increasingly useless, as the fraction of coins that have been recently mined grows smaller by the day. With over 7.2M BTC created, daily production is now falling below 0.1% of the existing coins. The relative fraction keeps diminishing, and they are shared among many small miners these days.
That said, I believe the statement to be false. Miner hardware amortization time may be important for difficulty, but is unimportant to price. Speculation is dominant, and thus the important part lies in the expectations of those holding or buying BTC.
PS: I find it bad practice to chain words like "real, actual, true, accurate" in a topic. Interestingly, such findings correlate well with false statements inside.
By the way, for all you former miners, the best thing to do right now is perform services or sell products for BTC. Then you're slowly causing the amount of BTC available on the exchange to lower since it's going to you instead of an exchange. Less available BTC on an exchange means higher prices. That means you're raising the price of the BTC that you just acquired simply by acquiring it and you didn't have to mine anything. Talk about a good investment!
Or... BUYING goods and services? (I'm for sale!
)-Jix
I read a post by Tux in one of the threads yesterday I dont remember which one, but he said the stolen wallets they have been following have indeed been selling off at a very fast pace.
By the way, for all you former miners, the best thing to do right now is perform services or sell products for BTC. Then you're slowly causing the amount of BTC available on the exchange to lower since it's going to you instead of an exchange. Less available BTC on an exchange means higher prices. That means you're raising the price of the BTC that you just acquired simply by acquiring it and you didn't have to mine anything. Talk about a good investment!
I'd fall into that category but I never held any coins, always sold in 1 to 2 BTC increments as I earned it. I did just get to the break-even point a few days ago. Any miner that held the coins with the intention of getting a free video card should have done the same, holding coins was a bad gamble.
To date I've sold 55 BTC for a total or 816.77 USD. Not bad at all. Thanks BTC investors.
Also, you all can rejoice that I've stopped mining and removed 1.2 GH from the mix. Current market prices aren't worth it when electric is $0.15 kWh (thanks Progress Florida), even though it'd be profit from this point.
To date I've sold 55 BTC for a total or 816.77 USD. Not bad at all. Thanks BTC investors.
Also, you all can rejoice that I've stopped mining and removed 1.2 GH from the mix. Current market prices aren't worth it when electric is $0.15 kWh (thanks Progress Florida), even though it'd be profit from this point.
You know you don't get paid USD for mining, right?
it's not a loss until you sell it. So if you ever think that the price of BTC at any point in the future will rise into the retroactively profitable range, keep mining.
I'd fall into that category but I never held any coins, always sold in 1 to 2 BTC increments as I earned it. I did just get to the break-even point a few days ago. Any miner that held the coins with the intention of getting a free video card should have done the same, holding coins was a bad gamble.
To date I've sold 55 BTC for a total or 816.77 USD. Not bad at all. Thanks BTC investors.
Also, you all can rejoice that I've stopped mining and removed 1.2 GH from the mix. Current market prices aren't worth it when electric is $0.15 kWh (thanks Progress Florida), even though it'd be profit from this point.
To date I've sold 55 BTC for a total or 816.77 USD. Not bad at all. Thanks BTC investors.
Also, you all can rejoice that I've stopped mining and removed 1.2 GH from the mix. Current market prices aren't worth it when electric is $0.15 kWh (thanks Progress Florida), even though it'd be profit from this point.
I've seen a lot of minor reasons why it dropped but the real reason is obvious. The distance in time from when GPU mining really took off to about a week ago is approximately the time it takes to pay off the average efficient set of cards. If I mined from April to now, my cards would be paid off too. So people with lower budget simple rigs are hitting that level and thinking about selling for USD or permanently withdrawing their USD from the exchange so their long term investment ends nicely instead of continuing to risk it.
The majority of miners joined to make money/get "free" cards so if you've made around the cost of your rig and saw the price drop and stay there for a few days then sneak down a little more then stay there and show no sign of raising but you're sitting on like 30-50BTC, you're going to take the opportunity to dump them all on the market just in case it drops to like $2 and ruins your entire mining experience.
Unlike other people, I'm going to actually post evidence. 2 months ago there were about 8 radeon 5830's on ebay with the cheapest at $140. Now there's 38, almost all used, almost all referencing bitcoins, and the cheapest around $127. People are definitely selling off their rigs now that the price dropped and they've already "cashed out."
What's not causing the drop is:
- investors because no investor sees it drop like $2-3 and decides to sell. That doesn't make any sense and if they're as stubborn as me, they won't sell it at a loss even if it takes 6 months of sitting on BTC to prevent it.
- any blog post, news article, or forum post caused it because our opinions on BTC is pretty set in stone and can't be shaken by something so insignificant.
- a massive theft and sell-off because we should have heard about it by now. It would have been at least like 500,000 BTC to get to this price and that's almost 10% of all coins that exist.
Great real-world analysis! The majority of miners joined to make money/get "free" cards so if you've made around the cost of your rig and saw the price drop and stay there for a few days then sneak down a little more then stay there and show no sign of raising but you're sitting on like 30-50BTC, you're going to take the opportunity to dump them all on the market just in case it drops to like $2 and ruins your entire mining experience.
Unlike other people, I'm going to actually post evidence. 2 months ago there were about 8 radeon 5830's on ebay with the cheapest at $140. Now there's 38, almost all used, almost all referencing bitcoins, and the cheapest around $127. People are definitely selling off their rigs now that the price dropped and they've already "cashed out."
What's not causing the drop is:
- investors because no investor sees it drop like $2-3 and decides to sell. That doesn't make any sense and if they're as stubborn as me, they won't sell it at a loss even if it takes 6 months of sitting on BTC to prevent it.
- any blog post, news article, or forum post caused it because our opinions on BTC is pretty set in stone and can't be shaken by something so insignificant.
- a massive theft and sell-off because we should have heard about it by now. It would have been at least like 500,000 BTC to get to this price and that's almost 10% of all coins that exist.
I agree
I've seen a lot of minor reasons why it dropped but the real reason is obvious. The distance in time from when GPU mining really took off to about a week ago is approximately the time it takes to pay off the average efficient set of cards. If I mined from April to now, my cards would be paid off too. So people with lower budget simple rigs are hitting that level and thinking about selling for USD or permanently withdrawing their USD from the exchange so their long term investment ends nicely instead of continuing to risk it.
The majority of miners joined to make money/get "free" cards so if you've made around the cost of your rig and saw the price drop and stay there for a few days then sneak down a little more then stay there and show no sign of raising but you're sitting on like 30-50BTC, you're going to take the opportunity to dump them all on the market just in case it drops to like $2 and ruins your entire mining experience.
Unlike other people, I'm going to actually post evidence. 2 months ago there were about 8 radeon 5830's on ebay with the cheapest at $140. Now there's 38, almost all used, almost all referencing bitcoins, and the cheapest around $127. People are definitely selling off their rigs now that the price dropped and they've already "cashed out."
What's not causing the drop is:
- investors because no investor sees it drop like $2-3 and decides to sell. That doesn't make any sense and if they're as stubborn as me, they won't sell it at a loss even if it takes 6 months of sitting on BTC to prevent it.
- any blog post, news article, or forum post caused it because our opinions on BTC is pretty set in stone and can't be shaken by something so insignificant.
- a massive theft and sell-off because we should have heard about it by now. It would have been at least like 500,000 BTC to get to this price and that's almost 10% of all coins that exist.
The majority of miners joined to make money/get "free" cards so if you've made around the cost of your rig and saw the price drop and stay there for a few days then sneak down a little more then stay there and show no sign of raising but you're sitting on like 30-50BTC, you're going to take the opportunity to dump them all on the market just in case it drops to like $2 and ruins your entire mining experience.
Unlike other people, I'm going to actually post evidence. 2 months ago there were about 8 radeon 5830's on ebay with the cheapest at $140. Now there's 38, almost all used, almost all referencing bitcoins, and the cheapest around $127. People are definitely selling off their rigs now that the price dropped and they've already "cashed out."
What's not causing the drop is:
- investors because no investor sees it drop like $2-3 and decides to sell. That doesn't make any sense and if they're as stubborn as me, they won't sell it at a loss even if it takes 6 months of sitting on BTC to prevent it.
- any blog post, news article, or forum post caused it because our opinions on BTC is pretty set in stone and can't be shaken by something so insignificant.
- a massive theft and sell-off because we should have heard about it by now. It would have been at least like 500,000 BTC to get to this price and that's almost 10% of all coins that exist.
Jump to: