Topic: Why is the value dropping? - page 4. (Read 4324 times)

It has already dropped this low to those who run older ASICs. I think that most miners are accumulating coins and hoping for a better future, while covering losses with their own money. But speculators also know this and they know that miners can't hold on forever. And the longer they have to accumulate their coins, the bigger the avalanche will be.

A good question, but it's better to calculate the cost of sustaining bitcoin mining in dollars.
I don't currently have much time, but I'll try to draw some calculations on how much exactly sustaining it's mining costs. And that should include the point that the owners of mining equipment eventually want to see ROI.
If someone has more time, then I would be clad to see some calculations on how much does sustaining bitcoin mining actually costs.

I've often wondered what would happen if bitcoin dropped so low that it quickly became unprofitable to mine. Would all the miners just pack up and cut their losses?

How many existing bitcoins are required to pay for bitcoin mining?

Bitcoin mining is just too expensive to sustain this price.

If not enough new money will flow in, then value will be taken from the existing coins to feed the abomination that called is bitcoin mining
That's one of the reasons why there can't ever be any stability with bitcoin.

What's different about the recent Nov 2013 bubble is that it has taken so long for the bubble to unwind. The bubble is still deflating 12 months later, whereas before full deflation occurred within 2-5 months.

This is important as it is resulting in changing attitudes. There were always those who lost a load of money, but at least they saw the market improving within a few months, and if the HODLed, then they recouped their losses. But now those who foolishly bought at the peak are still seeing further losses 12 months later, and are wondering whether they should try to save what little value they have left.

I believe this stretching out of the decline period reflects that the market is now more dominated by zombie-like HODLers, who keep their positions, and even buy small amounts more, limiting the inevitable post-bubble price declines to a snail's pace. Meanwhile, the price remains high enough to fund miners production of ever more BTC.

The problem with this, is that for the rest of the world, BTC means slow decline. No one wants to use it for payments, as now they expect to lose value whilst holding BTC. The slow decline is undermining the true value of BTC, which is in its functions as a means of transferring value between people. The slow decline is also wiping out the speculative opportunities.

No, there is more than one rise and fall, but the last rise went so high that the previous ones are almost imperceptible when viewed on a multi year chart. The red arrows on the one below show three rises.



https://www.coindesk.com/price/?bpi=bpi

If you zoom in on each of the smaller rises you can see they were actually quite big. Here's the 2011 rise zoomed in on the coindesk chart.

We're in a strong technical down trend. And while the infrastructure around and trust in BTC is growing, the fundamentals may not justify the price at present. The fact is that mining farms are still making bank selling at the current rate, and until demand begins to outweigh this sell pressure (added to by merchants and bag holders), we will continue to down trend. With bumps and valleys along the way.

This. If mining costs more than bitcoins, miners actually take bitcoins out of the system to pay for their electric bills.

So if bitcoin has a market cap of $1 billion and electricity costs are $500 million, miners will actually pull $500 million worth of money out of bitcoin.

Amazing huh?

And if the electricity costs are over $1 billion...the cost of bitcoins will go negative and anyone using bitcoin will actually be paying to use it.
 


Or, more realistically, if miners are selling all of their coins there is a built in maximum inflation built into bitcoin which can easily be eaten up by the influx of new users.

perceptions change, sometimes rapidly, which is why we end up with rapid fluctuations in the price of Bitcoin

Yes I see it goes up and down but when you look at the big picture over the years it went up once and now is generally going down. There is only one "rise" and "fall" on the  4 year chart.

Enlarge the time to chart that you will find it is nothing now.

The value is dropping because people are selling their coins at a rate that is lower than what they were previously sold at. It's literally that simple.

Welcome!  That is a great reminder:  there are literally billions of people who still know nothing of bitcoin.  Voidful:  Do you have any bitcoin... any at all?

Just like the stock market, looks like a big over-reaction.

like any speculative 'investment', it goes up it goes down, sideways...
it's just the way it is.

Well, if it gets too high, miners drop out and the difficulty decreases and things go back to normal.

Not the main reason at all.
When sell orders are put in, coin is moving from weak hands to strong hands.

The reason the price is going down, is there are more sell orders than buy orders.

Now you need to ask everyone one who is selling why they are selling.  And that's your answer.

I registered to come and ask the same question  I stumbled upon Bitcoin around 4 months ago and only now finding this forum!