Why is BTC now ~$8,780? Simple... - page 2.

Reid

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Wow! If I had only known that, then it would be easier as always. Grin

Imagine just looking at EHS and there you go, here is the price of it.
That would really simplify all and we dont even need to speculate here anymore.
We dont need those hard working analyst and technical viewers. We just need to ask the miners what is the EHS and Voila! we can trade it easily.
Wait! If all of us already know how to calculate the price, then what is the sense of trading it? Grin

karanggatak

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I think this is not a matter of hashrate. bitcoin has high volatility so we don't need to worry or be confused with the current decline. after yesterday it dropped to $ 8,800 today bitcoin pumps again to $ 9,000. bitcoin is always like this fluctuating and this can be used as a good opportunity to be able to make a profit. I never worry when bitcoin goes down because I'm sure bitcoin will pump even higher. and in my opinion the decline yesterday was because bitcoin was correcting the market..

exstasie

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Quote from: The Sceptical Chymist on November 10, 2019, 08:56:29 AM

There is no rational way to predict what bitcoin should be valued at, though I've read similar theories like this based on mining. The only thing that affects bitcoin's price is supply and demand--and since supply is increasing at a known rate, it basically all comes down to demand

Supply is increasing at a known rate but that says little about the total amount of BTC that will be sold on the market. Put another way, miner supply becomes less important over time as we head closer to zero inflation.

So both supply and demand are very opaque from a fundamental standpoint. That's why TA remains the best approach to price analysis.

Wexlike

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Quote from: 1Referee on November 10, 2019, 02:26:51 PM

Quote from: SapphireSpire on November 09, 2019, 08:39:01 PM

Recent hashrate was 82 EHS, therefore:

Recent? Like a month ago? The hashrate over a greater number of blocks hasn't gone under 90 eh/s.

The hashrate you are referring to is measured over a low number of blocks, which currently has jumped to 100 eh/s, so your 82 eh/s figure is not accurate anymore, just like how my 100 eh/s figure won't be accurate anymore in the forthcoming hours. That alone makes calculating the price versus the not accurate hashrate figure not a good foundation to build on to determine what a "fair" price is.

Did we forget what happened last year? People were so confident that miners needed the $6000 level to operate profitably, that they assumed $6000 was the bottom. It couldn't go below $6000. Well, it did and it went below $6000 a lot.

We have some background info now:

Hut 8 Mining Corp. Reports Financial Results for the Third Quarter of 2019

Q3-2019 Highlights:

Revenue of $26.7 million; Mining Profit Margin of 58%, and Adjusted EBITDA of $14.7 million.
Mined 1,965 bitcoin at a Cost per Bitcoin of US$4,363 inclusive of electricity costs, mining pool fees, and all other production costs.
Strengthened balance sheet through the reduction of debt by $3.6 million and reduced accounts payable by more than $6 million from the prior quarter.
Increased Retained Bitcoin inventory by 7.6% from the prior quarter to 3,496 bitcoin.
Announced petahash capacity increases of 19.6%.
Approval for trading on the Toronto Stock Exchange.

1Referee

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Quote from: SapphireSpire on November 09, 2019, 08:39:01 PM

Recent hashrate was 82 EHS, therefore:

Recent? Like a month ago? The hashrate over a greater number of blocks hasn't gone under 90 eh/s.

The hashrate you are referring to is measured over a low number of blocks, which currently has jumped to 100 eh/s, so your 82 eh/s figure is not accurate anymore, just like how my 100 eh/s figure won't be accurate anymore in the forthcoming hours. That alone makes calculating the price versus the not accurate hashrate figure not a good foundation to build on to determine what a "fair" price is.

Did we forget what happened last year? People were so confident that miners needed the $6000 level to operate profitably, that they assumed $6000 was the bottom. It couldn't go below $6000. Well, it did and it went below $6000 a lot.

YuginKadoya

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Hashrate is not the key, this is simply fluctuation doing its work and I guess this is only a small decrease on the price and now as I speak the price is back again in $9000 USD, This is very simple indeed all of us are speculating yes, but what do we expect cryptocurrency is very volatile the price would surely not stay in one place it will surely move upward or downward at all times, maybe you are just used with the price being calm for a couple of days but for Bitcoin enthusiast this slight movement is very normal indeed.

el kaka22

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Hashrate doesn't reflect the price at all times, there needs to be a bit of increase from the hashrate in order to have some sort of profit as well, these people spend 8200 dollars to make 8780 dollars, that is not even a decent profit if you ask me, hence why the price should be even higher.

Still, when you look at last year when the price fell from 6-8k prices to close to 3 thousand dollars you will see that price could also go under the mining cost, people who have mined or people who have bitcoin from trading or some other way (Craig Wright for example got it for free) could just sell all their coins and even miners can't stop it, they just stop their machines to not make a loss which drops the difficulty and then they start it back up again when it is easier to mine.

jets567

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Quote from: danherbias07 on November 10, 2019, 02:58:04 AM

So what else are we doing here if we cannot even help with the increase in value of bitcoin? We are just puppets of the miners? Grin

Exactly! if we are depending on miners hash rate for the value of Bitcoin then it would be so easy to predict its price on the next coming months. I know that miners may somehow affect the price of Bitcoin but they don't have the full authority to dictate its price since large amount of Bitcoin is hold by whales and exchanges.

alexsandria

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It ain't working that way though, simple math lol. It has derivatives out there, and tons of people out there having some transaction stuff, buying and selling bitcoin that is directly affecting bitcoin price. It ain't all about hash power and miners should increase theirs to as well market will go increased. 'Cause if it will be going that way I am quite sure that miners need to set standards for them to increase bitcoin price way back before.

The Sceptical Chymist

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Quote from: Fatunad on November 09, 2019, 11:15:07 PM

It does really work that way?

No, it doesn't. There is no rational way to predict what bitcoin should be valued at, though I've read similar theories like this based on mining. The only thing that affects bitcoin's price is supply and demand--and since supply is increasing at a known rate, it basically all comes down to demand, or the buying and selling of bitcoin on exchanges. That's it.

OP's theory might sound reasonable right now, but it doesn't exactly explain why bitcoin got to $13k a few months ago or any other extreme deviation from the theory.

cryptoangel

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Quote from: fabiorem on November 10, 2019, 06:48:02 AM

Miners are the biggest whales, because they create bitcoin from electrical power. They need to distribute it, hence why the price tanks between the crash and the halving.

I don't think miners are biggest whales in Bitcoin because current scenario more than 85 percentage of Bitcoin is circulation so traders are the main reason for pump and dump. Normally most of the investors are concentrate trading platform so once they sell continuously it will drop gradually or else everyone concentrate buying the Bitcoin it will going to moon.

barota

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I am in my opinion ; miners influence prices somewhat, but supply and demand also remain an important factor in influencing prices ;some traders rely on wrong analysis and charts, so some are still selling but as soon they have finished selling and the effect of some whale who control the prices is reduced. We find the opposite. In other words, prices will rise and be stronger

pooya87

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lol. funny post.
you basically took the current price then divided the hashrate by that price to get the ratio and then reversed it to use that ratio as if it is a known thing to compute the price.
i can do the same thing with any other variable you like. i'd say because on June 15, 2017 price reached bottom and it was 878 days ago then price must be $8780 today Cheesy

fabiorem

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Miners are the biggest whales, because they create bitcoin from electrical power. They need to distribute it, hence why the price tanks between the crash and the halving.

BitHodler

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The speculative nature of this market makes it pretty much irrelevant what the miners pay in electricity to mine one whole Bitcoin.... traders just follow the chart and trade it as it comes, bearish or bullish.

If miners generate their coins well below the trading rate of Bitcoin and dump them below critical support levels then they are ruining their own market.... traders couldn't care less as they can make money in both directions.

blckhawk

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I'm not sure whether this is true or not, but I have also read a thread here stating or analysing the correlation between hashrate and Bitcoin's price. Although I think there is something that drives the other, I'm also sure that there are a lot other factors to consider that dictates where the price is going. Recent news, community stance, adoption, current market demand, etc. also affects the price somehow. Maybe it is true when demand isn't going down, but the market is unpredictable, mainly because of the existence of the whales and how fast the price trend changes on a volatile market.

Wysi

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Quote from: Stargazer on November 10, 2019, 12:17:07 AM

You are wrong here, bitcoin price is not dependent on miners hash rate. If it that easy then every miner would do that to push the Bitcoin price. This price dump can be a manipulation by the whales so that people can sell at low and they can fill their new bags! But it can be calm before the storm. In December, the crypto market may see a very good pump!

Yes there is no way that miners can manipulate the price and I am telling this because I had been mining in the past, even miners depends on whales for price fluctuations in order to sell at high. I really wish your predictions about December's pump comes true as it will change the market perception.

sheenshane

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Quote from: SapphireSpire on November 09, 2019, 08:39:01 PM

snip-
Miners, get your hashrate up and increase the price!

Because it has a correlation the when the hashrate goes down also bitcoin price will down. That was explained very well here [1].
It means that the higher the hashrate, the more mining activity and probably the more transactions made and that made Bitcoin price goes up. Of course, the basic factor has also connections or relatively about the demand and the supply.

If the demand will increase, of course, there will be more profit will come and hashing is also profitable for miners. But sometimes miners quitting in mining because it has a small ROI due to the high electricity cost they are going to pay.

NeuroticFish

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Quote from: danherbias07 on November 10, 2019, 02:58:04 AM

What?!! That's it?
Do you mean all those discussion about demands and usage is all bullshit?
Really? I doubt that. Grin

So what else are we doing here if we cannot even help with the increase in value of bitcoin? We are just puppets of the miners? Grin

The good thing though is that, you are completely incomplete with what you said.
It lacks the formula of how the price should really be seen.

Of course it's wrong.

The price *should* not go lower than the price price to produce it (but it's not necessarily so).
But what's the price to produce Bitcoin?

Some miners may have already the ROI for equipment. Some miners may have electricity price nearly 0 or may produce their own electricity from renewable sources. What if they already have ROI for that equipment too?
Some miners may hold, some miners may sell at a loss. And some miners may go out of business (or relocate!) because their electricity is too expensive anymore and they have no profit.

And many traders are not miners. There are investors, there are speculators, and the bigger ones may have quite an effect on the price.

So no. OP's equation is oversimplified, hence it's wrong.

danherbias07

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What?!! That's it?
Do you mean all those discussion about demands and usage is all bullshit?
Really? I doubt that. Grin

So what else are we doing here if we cannot even help with the increase in value of bitcoin? We are just puppets of the miners? Grin

The good thing though is that, you are completely incomplete with what you said.
It lacks the formula of how the price should really be seen.

Topic: Why is BTC now ~$8,780? Simple... - page 2. (Read 517 times)