Topic: why is bitcoin price important? - page 3. (Read 3707 times)

yes technically(functionally) bitcoin 2012(price $6) could buy something worth $120 by giving the retailer 20btc
just as easy technically(functionally) as bitcoin 2022($20k) giving a retailer 0.006btc

so functionally yes bitcoin can pay retailers X amount at any token amount representative of a price
.....
as for your endless question your not satisfied with.. the reason for the price being at $20k/btc and not at $6/btc is again related to the mining /acquisition costs that propelled the underlying value up which then propels the price speculation above it up

the price is important because mining costs now do not cost the same $3+ per coin cost of 2012 GPU mining

if mining now was still say $3+/coin underlying cost, the speculative market would not be in the $15k-$70k range
it would be in the $4-$130 range

you are seeing ethereumPoS now learn this. they are trying their hardest to now pump ethereum speculative price up in a bubble to keep it up as long as possible but eventually the price will correct down to the new value level thats atleast 20x lower than its PoW underlying value last month
yep ethereums underlying cost has significantly dropped and the markets are responding and some pumpers are trying to fight that response. but they wont be able to pump it forever
..
anyway back to explaining the bitcoin market
most investors are minnow (small) investors doing trades of $400-$600 per order average
back in 2012 bitcoin sellers had costs of ~$4 and were wanting a lil speculative profit so selling 1 coin for $6 and obviously when a buyer had $400 on offer, a seller would give them 66 coin for that $400

now it costs $15kmin so those lucky miners want a lil profit so sell for more then $15k by offering the small minnows ~0.02btc for $400
which equates to ~$20k/btc

no one today would give someone 66btc for $400
because no one is foolish to sell for that kind of loss amount

as i said if they really need that $400.. they end up giving the buyer 0.02 to get the $400. but without selling at a loss

you wont find any seller today that really needs one of those $400 minnow offers. hand over a whole coin or 66 coin. they would give 0.02btc though. because thats a fair price for $400

---

bitcoins summer autumn 2022 price of $17k-$24k isnt just some random price picked out of a hat and set magically today.. its a build up of 13 years of price discovery based on the increased underlying costs of mining bitcoin which has increased over 13 years

the reason why bitcoin did not stay at $70k ATH this year.. is because the difference between the $15k bottom of this year and that ATH.. is the speculative price window.. not value

where $70k was not good value. it was not supported.. it was inflated/pumped into a bubble of unsustainable premium/greed. which reached its peak and corrected back down to good value because $70k was a unsustainable price.. and not supported to stay at that level

i'm not sure we can justify bitcoin's price by saying that traders need to be able to make money.


most businesses in the united states don't really deal with bitcoin. nothing i buy do they take bitcoin, but they take credit cards. for me to have to get bitcoin to just buy something wouldn't make much sense because i have to first send my money to a 3rd party that i don't really feel so comfortable trusting anymore than i have to just so i can buy some bitcoin so i can pay for something?

and bitcoin can't perform that function at any price level? why does the price level matter so much for those things? i don't think it does.

Every traders want to make a good profit from Bitcoin investment, which there are some procedure you must follow to enable you to achieve what you want by buy Bitcoin when the price is low, which is very important for every traders to embrace in the community. If you buy Bitcoin at a lower price in the market, show that you will have something good to earn when the price increase higher, because it is the price will determine if you will make a good profits at the end of the market or not, that is why many people buy Bitcoin when the price decrease in the market and hold for the price to increase higher before they can sell.

There may be many different opinions about bitcoin, but it is clear that everyone wants the best for bitcoin. Talking about prices, of course, everyone doesn't want to lose even though bitcoin has a myriad of benefits and features that make it easy to make digital transactions between countries.

Bitcoin is a currency and the purpose of this digital currency that decentralization therefore worked on blockchain technology but the price matters because as we use as a payment method then the price is fluctuating on every minute which makes many problems like profit or loss for retailers because they need some bitcoins for business liquidity,
So this is volatile market therefore many investors and institutes come to this field for investing and making profits not as a futuristic technology.

BTC was created as a way to conduct transactions without the intervention of a trusted third party i.e banks etc.
Its emergence amid the global financial crisis, which shook trust in banks was perfectly timed so BTC enabled transactions using only digital identities,This made Bitcoin the preferred currency. Btc value has importance to investors who utilize BTC for investment purposes.

bitcoins halving 2012 - november
price pre halving $6 price post halving $13

bitcoins halving 2016 - july
price pre halving $400 price post halving $960

bitcoins halving 2020 - november
price pre halving $5k price post halving $11k

halvings as the name suggests only cause a doubling of cost..
2x trigger

but comparing the mining rates of asics. from say the 2016 2020 generations
they have a factor of 3-5x deficiency
which can push the mining and market dynamics at play up by a 3-5x

yep cpu only managed 1mhash.. GPU managed a 100mhash
hense the $0.30 ->$32.00 first ATH

GPU 'rigs'(multiple gpu per mainboard) managed 0.6Ghash.. first asics were 60ghash
so the 2012 $12 became the late 2013 $1200 ATH

the 14Thash s9 become the 85thash s17
this pushed the 2017 ATH to be a 2021 of $65

right now miner owners are swapping out old gear where say if they had 1petahash
=12 asics of ~85thash at 2.9kwh each (34kwh total/h)
it becomes
=7 asics of ~140thash at 3.01kwh each (21.07kwh total/h)

this has caused the 2020 bottom window to drop from ~$25 to ~$15k
once you account for all costs

but that spare rack space and less electric used allows miners to expand and put another 41% on later this year to come back up to costs of last year

and then push further if they choose.. but we just are not at the trigger point of adding more asics.. we are still at the deficiency sway zone before the next hashrate push


thats where the dynamics play out

yes there are the utility factors, such as compared to fiat(inflation) bitcoin(deflation) offers many things
you can set up off shore fund holding without a bank manager/lawyer
you can set up family trusts without bank manager/lawyer
you can move more then $1k value without having to ask a bank or being questioned
some see the fee's as being worth 6 minutes of min wage labour.some see fee's as being a days labour

lots of different factors and reasons people like bitcoin more or less

aswell as factors already mentioned are the cost factors..
in hawaii, germany and japan. they have highest electric prices. and so they are not inclined to want to mine unless the price was high but they are willing to buy bitcoin at any price because any price is below their mining cost so they see the price as being great value at any price individually. its these less efficient regions where people are willing to buy for more than the low. because its still cheap value for them to buy. but even they have their limits. which is the ATH top window effect

all bitcoiners are bitcoiners..
those that have courage and wealthy pockets and risk takers will invest in hardware and if they are the more savvi,organised. their acquisition price would be at the low end
those less courageous and just want get in and out quick become buyers and sellers where they take the premium speculative route for the convenience, ease, preference

read through the bitcointalk posts of early 2010 when the first market places were opening where people were describing "price discovery" where even then 12 years ago they understood the min price being at or above mining cost

as for mining vs buying decisions its the same as
EG if you could buy land and plant an apple tree vs just going to a fruit market to buy an apple. which would you choose
EG if you could spend a couple weeks learning how to fish or going to market to buy a fish. which would you choose
convenience to just grab what you want when you want. or have to wait around for getting rewards

they all have reasons to want bitcoin and fight others to get it both in mining and on the markets.

if only a couple hundred people were interested then it, and most were of african decent where their disposable(spare/investable) income was small.. then yes the value line and price would be like a crappy PoW altcoin of low value and low price..

the more people interested, the more they are willing to buy/acquire, the higher everything goes due to the competition.

there are other factors at play in the markets

although in 2012 there were only ~11m btc in circulation. the price was about $6-$13
now there is 19m in circulation. but the price is not lower. as some think more supply =less price..
the thing is on the market there are not 19m coins on the market order books

what occurs if you check out the statistics is that most small investors (majority) only invest about $400-$600 per order
and with those holding bitcoin knowing the costs and prices go up. they dont just pander into buys demands of selling whole coins for $400-$600
instead they only offer out small decimals of coins

so when people think its a if there is $xbill fiat vs xk btc the numbers play out to that ratio.. they are wrong

..
there are alot of factors that play into price discovery but you will find that their triggers and reasons all fall back to the underlying costs to make it on the planet at the lows and highs.. where peoples buying demands fall within that window
and where no seller wants to sell below the bottom of the window. which creates a non-zero zone of no mans land that supports prices being above a non-zero amount. which currently sits at $15k.. and no one wants to buy above a certain amount which creates another no mans land line at the top where everyone gives up trading above.

The bitcoin usage is more important than the price. However, everybody is focused on the price because bitcoin is the greatest performing asset of all time

The next big predictable trigger looks to be the next 'halving' in 2024 at which point the hashrate difficulty doubles making it twice as tough (or half as lucrative) to mine BTC. This should mean that anyone wishing to obtain or use Bitcoin will become more likely to buy it than mine it, pushing the prices up. As long as the tech development stays top-tier & it remains a functional internet currency, which is quite likely, we will likely see more intense bull runs 2024-5.

i think it's very logical to base bitcoin's price window on mining costs that does make sense, in a sense. but there has to be something more that gives bitcoin its market price like overall public demand. miners are probably a very small subset of all bitcoin users therefore, if bitcoin were only valuable to them, it wouldn't matter what their mining costs were, bitcoin would be worth very little in the real world.


i wonder what the next trigger will be. it just seems like an arms race honestly with no end in sight and no ultimate winner. but they can't stop because the other guy would gain an advantage.

something to be very aware of about the "top window line"
in regards the the 4 main ATH events
2011- trigger shift from CPU-GPU mining
2013- trigger shift from GPU-asic mining
2017- trigger efficient s9(well efficient at the time)
2021- trigger efficient s19(well efficient at the time)

what occurs is when a new major mining efficiency change occurs..
thus with most efficient and well funded operations shift their old gear out and replace it with new gear. but upto a limit of current hashrate. meaning less electric less asics needed=les cost
this makes them mine cheaper
it can lower the bottom window

however with the spare cost they save on electric and extra space on shelves they made by being more efficient they can then expand their asics to do more hashpower

this then effects the hashrate competition
whereby the bottom window starts to rise again
also.. separate effect..
those at the top cost(least efficient) end up having less coin per cost= more cost per coin. thus it raises the top window line

by raising the top window line where those less efficient miners cant mine cheap and losing in the hashrate copetition.. they instead BUY coin. which causes a price rally all the way to their top break even line

my estimations..

the biitcoin trade window based on mining costs is a window of $15k -$~90k
where no one can mine below $15k so no one wants to sell below that anywhere on planet..
and everyone and their mother can mine cheaper than $90k on the planet so why buy bitcoin for over $90k if they can get it cheaper right now via other means

so all the projections of $100k=> $250k > $1m+ are just fantasy numbers during 2022

in 2020-21 the top number was $70k and guess where the ATH peaked. yep 70k

in 2017 the top mining cost of most expensive electric and reasonable usable asic was $20k.. and yes it hit that and halted

but here is the thing.. as hashrate goes up the underlying most efficient bottom moves up because mining costs move up..
and for the top window line. obviously that goes up

right now to get to 250k the hashrate has to go up by 2.5x or electric prices (only part of the mining cost is electric) have to go up multiple times

so in short.. no not this year.. nor early next year, it will take a lot longer to go to $250k plus

as for $100k that can happen sooner, just not yet

You're way ahead of the game there, talking like 2025 prices B)

must be waiting for something. at this rate, bitcoin might need to get to $250k or $1mil just to keep up with the joneses.

We're waiting for the 4 horsemen of the apocalypse to arrive

as I mentioned before, I have yet to hear any logical argument as to why bitcoin should be priced at $1,000,000 or even $250,000. people just say "it should be this price" without explaining why. yet to hear a good reason why that makes any sense. if if should be priced at $250,000 then why isn't it that price already? what is it waiting for? joe biden to print more money?

People have as a basis in their heads that an asset is only worth its price in fiat, it is something that cannot be blamed, everyone has their way of thinking and that is respected, but the value of Bitcoin goes much further that of fiat, at the moment there is a relatively low price for what it should cost to have 1 bitcoin, it should be about $250k if there were no risks of wars and risks of pandemics, global circumstances affect the price, because investors they panic and want to have their money well protected, I don't blame them, money always seeks to keep its value, for me that is the importance of price.

That's why people are taking in this because in this world everyone wants to get profit of that whether it is innovation or techonology invention ..You know earlier days vehicles were used for convenience but today it is used for fashion and much more so after some time whatever it is everyone want to get profit of that. I think it is best option to invest and secure your future

the conversion of bitcoin to fiat currency will indeed be more interesting to follow its development. especially if the price goes up, there will be many investors who want to buy it, because with the increase it will bring everyone psychologically to take advantage of the moment, and the results can immediately be enjoyed because we have become rich and can vacation wherever we want. and from the price increase, we can assume that the profit increases with the capital we invest

Theay can start their prices in btc, but it will always be a question of legalization. And I think "more mainstream" is not enough, they could do that right now, there are a lot of ways to do it.

The understanding of this with a hardcut i don't think will happen, that would be impossible. The process will take many years and then you will develop a new sense for prices of a new currency.

Nothing from mine. How do you think the dictators in those countries would respond?

It would be so much easier if people could decide more freely what they want. There are a lot of rules that make it more difficult. More we plan, more things go wrong.