Topic: Why the Bitcoin price is not going to fall below a certain price point - page 2. (Read 435 times)

i am no expert in mining but just as an example i remember reading that litecoin changed to Scrypt to prevent ASIC mining. but it has ASICs for LTC now!
there is also a common saying that goes "there is no ASIC resistance"!

and on top of it, what is CPU, GPU mining? can't someone just create a new ASIC for mining these coins? the fact that nobody has bothered to do it yet only means that there were no market for it.
i don't see it as strength. i see it as something that has not yet been put to test.

No the price of mining gold is pretty fixed. You have tractors and digging and labor etc. and it's always the same regardless of the price of gold. The cost of mining gold is not a variable in a computer. You absolutely need a certain amount of money to mine gold regardless of how many people are mining gold. With bitcoin, on the other hand, if all the other miners except you stopped mining, then the cost of mining bitcoins would be 0 for  you.

Perhaps, but once new mining hardware has been put into operation and new power lease deals have been struck (often 6-12 months in advance), miners are reluctant to turn off mining rigs in response to a falling price, which in turn keeps the hashrate up.

So they would rather withold newly minted coins in order to restrict supply, thin the exchange floats, and thus get a better price. Which keeps their ROI up and thus the price up.

Nice theory...  Here's mine.  We know that BTC has become a 'stone in the bankers' shoe', meaning it has become too disruptive, annoying and unpredictable.  We also know that they are the 'masters of the universe', meaning they have the political power, the money and everything else they need to take something down if they truly wanted it to happen.

And based on what you said about the costs of mining, what you see as strength, I see an attack vector.  What if all the world's bankers are starting to work together to crash BTC and keep the price down long enough to bankrupt the miners out of business and discourage anyone from mining it again?

I think this is where the CPU and GPU mined coins will find its strength.  *cough* Monero *cough*  

That's like saying that there is no cost for mining gold or other valuables because the price is determined when you sell it.
Sounds a bit like Schrodingers Cat.

Current Bitcoin difficulty and available mining gear does represent the cost of a Bitcoin.

Theres no such thing as a cost of production for bitcoin. The bitcoin difficult is adjusted every 10 minutes to account for network competition. Mining doesnt affect price - other way around.

I don't buy your argument. As long as they can keep their operation running at some level of profit at $1000 or lower, why wouldn't they. They can be buying up cheap coins at that price like all the smart money and then wait for the next halving to start the next pump. Keep in mind that people were making the same arguments that it would never hit $200 (which was around a "cost per bitcoin" price at the time) after the 2013 ATH.. And it did.. And it stayed in that range for many months.

Something else to keep in mind regarding that cost per bitcoin. My calculations are already lower than that. In addition, as the price of bitcoin drops, more miners will shut off their equipment and/or move to other coins and so the cost per bitcoin will continue to drop. Same thing happened before and there's really nothing new here including "bad news out of china" after an ATH.

Now actually hodler sold out their bitcoins who are already in profit. Now its time to turn normal. Miners will start mining after chinese holdiay.
Also tethered margin traders sold out. so we are now in normal price miners will start to dump around 7k-8k level. So price will not rise more then 8k for a long time.
Maybe after halving price will again double and people will jump in the boat while price is rising.

At least it's not built on debt like the $ or Euro

And it's "safe" or "saved" .... not "save"

The point is that with weak hands selling their coins like there is no tomorrow, the cost of mining has no meaning for the time being. Miners could support the price, but at what cost? It's a very important decision that they have to make, because they can continue supporting the price without any effect due to how people keep dumping the price down, or they use these funds to function as buffer till the market climbs back up again. I personally find the latter option more realistic. With how the price has been peaking at near $20,000 levels, they have made themselves a tremendous amount of money, where we also don't have to forget the massive fees they have earned due to how congested the network was. The price will bounce back up once the panic amongst noobs calms down. People act like this is going to be the end, while we last year were hovering around the $1000 level. 

Oh i know, i know.

Because you can't get a negative value, thus it's value cannot fall below 0 in any reference currency or asset.

I guess we're all save now!

I don't even get the point of mining Bitcoin.  Except to make money.  Why does it even need to be mined?  Who said it did.  But I am only a newbie and don't understand anything. I don't think there is enough people to rush in and buy Bitcoin even at say 6.5k because there is no guarantee that it will go up any time soon.  Though it probably might a bit.  But a big fall is at least as much possible. 

Cost of mining a bitcoin is way higher than $60 so stop the FUD please

At 60$ per BTC Bitcoin would have a market cap of ~1 billion $ and not 100M $. You seem to have
made an error in your calculation.

Thank you for sharing your opinion.

Bitcoin will fall below $1,000 because there aren't enough people out there who want to buy bitcoin who will keep it that high. Miners can be incentivized all they want, it doesn't matter unless there are buyers out there. Why would anyone buy bitcoin now when they have so many options of alt coins, and bitcoin has so many major problems with scalability? They certainly are not buying bitcoin as a store of value since it is clearly failing as a store of value, and they aren't buying bitcoin to spend it as a currency since sending it to someone else requires nosebleed fees and often multiple days of waiting.

Why is bitcoin worth anything more than a tiny, speculative market cap? $100 million would be generous IMO, putting the price per bitcoin around $60 per bitcoin. That is a very optimistic/bullish estimate for the real value of bitcoin and where the price could end up.

My theory is that we haven´t seen the bottom yet. The price
continues to fall and the trading volume is still pretty high.

However, I think eventually the support for certain price levels will be huge.
Why do I think this will be the case?

In my opinion the main influencing factor is the cost of mining.

A few links that contain estimations of the current cost of mining a single Bitcoin:
https://www.benzinga.com/fintech/17/12/10932967/how-much-does-it-cost-to-mine-cryptocurrency

https://www.bloomberg.com/news/articles/2018-01-10/bitcoin-can-drop-50-and-china-s-miners-will-still-make-money

Besides, everyone should take into account that these estimates don´t include the enormous
investments in hardware that are necessary to even have a shot at mining a block successfully.
On top of that several big mining companies are based in countries where the breakeven price
is higher than for the Chinese miners.

The miners will eventually need to support the price at a level that still allows them to
mine Bitcoin profitably. They are heavily incentivized to do this, because they have invested
hundreds of millions of $ into mining equipment, bribes and other stuff.
There are several precedents where miners have propped up the Bitcoin price before and
they will do it again eventually, because the whole mining industry has grown so much.

Of course they won´t support the price at the current price level, because it could make sense
for some of the mining companies with a big warchest to first wait until some of their competitors
have gone bankrupt. But somewhere between 2500-3500 $ / BTC they will have to support the price
and they will do it successfully.

We won´t see Bitcoin below 1000 $ again, because the miners are heavily incentivized to prevent
this from happening and they have the money to do so.

Place your bids accordingly.