Bitcoin Forum

Coin Shares researchers found the average cost of mining a Bitcoin is approximate $6,300. So, the price jumped to $7,300 yesterday. And it’s profitable for the miners Forbes report said. What do you think?

The rebounding of the price of bitcoin has no linkage to the cost of expenses incurred in running a mining rig. The market was oversold and people sold in panic when there was a deliberate dump in bitcoin. This made the price plunge that deep but this stabilize with time and that is why we have seen the gradual rise in bitcoin. Let's hope next year brings up some good returns of investment in bitcoin.

This seems to be a hot topic lately and I am seeing it everywhere. People are assuming that mining cost is related to Bitcoin price but that is not true. Basically the hashrate is mostly followed by price. When the price goes up, so does the hashrate. However the opposite is not true. When price goes down the hashrate can either go down, stay the same or even go up. Usually when price goes down the hashrate stays the same or it goes up. So obviously mining becomes unprofitable for some, they just stop mining and move on. The price will not jump so that mining is profitable for mining farms, doesn't make sense.

Price had a huge surge by around $1000 or so because it landed on previous support and there were too many people short. The funding rate was very negative on Bitmex and obviously there would be some type of short covering rally which is what we saw. People either shorted the bottom or they shorted before the drop and their trailing stops hit. That's why the rebound was so huge and now we are trading sideways until the market decides which route to take.

Of course the miners will not sell Bitcoin is below the cost of production. Otherwise, the business was deprived of any meaning. I think that today's price is the objective price of Bitcoin at the moment. Below 6000 dollars Bitcoin is unlikely to fall. The recent drop to 6450 and the subsequent rapid rise to 7450 showed that there is a good level of support within these price levels.

when prices go down I'm sure there will be a rebound in prices, because when bitcoin reaches their support people will automatically buy it and create price reflections. and I think the price reflection some time ago provided quite a lot of advantages especially for those who took place at that time

I don't think there is any connection between price rebound and cost of mining. It's hard to tell exact reason but probably there was a disbalance in demand and supply. Price pulled back again and further corrections are possible also so don't be surprised if in the next days we see price below 7000$.

There is no relationship here. All I see is your conjecture. The average cost of mining is only part of the value of bitcoin. A small factor cannot make a big impact. Do you understand that? The average cost will be adjusted by the price of bitcoin, because when the price of bitcoin is low, in the event that it does not generate profits for miners, the miners will leave, and the cost drops. Or high bitcoin prices, many people will mine bitcoin, which means that the average spend increased. Or to be precise, the cost does not determine the value of bitcoin; on the contrary, the value of bitcoin determines the cost.

Well, I think it has less to do with miner costs and more to do with the upcoming holiday season. If you see the past trends, bitcoin and the crypto market, in general, soars high every year at the beginning of the year ;) so probably we will see a good bull run in 2020 and it is hence indicated through it!

what is sudden when Bitcoin price Bounced back?lol this is something to be thankful and not a sudden situation (not unless you are anti bitcoin)
soaring high in the beginning of the year?but remember Ethereum Grows high last january 2018 .

but yeah 2020 is expecting to bring fortune to all of the holders and miners so lets see what will happen in the 3rd quarter of next year because the effect will take place before end of year.

I really don't understand why you guys keep a connection between the mining profitability and the sudden spike, there's no correlation unless miners are manipulating the price which would I assume won't fit their narrative. Don't listen to Forbes, they've just put articles there's for click-bait and without proper research specially crypto news.

Everything is still based on supply and demand here.

I think what most people believe is that it is all tied up, but no concrete evidence is to be found. They believe that hash rates correlates to the price of Bitcoin, and also hash rates is connected with the cost of mining, in which also is connected with the current price. Still, there are no studies to be found that proves such theoretical statement. There are still a lot of factors, the market is volatile and whales could manipulate any time they wish.

In what specific country that research coin shares did? I always see this kind of topic and they always think that miners keep on mining because of the current price and the cost of mining is profitable for them which depends on the daily prices.

There's a different approach for every miner and the cost of doing it varies because the cost of electricity isn't the same. It could be the average but it's not the actual. Much better to get details from the miners themselves rather than from the media.

Not a strong reason but actually does make sense, it could somehow change the perspective of people regarding bitcoin which is "Created out of thin air" while actually it's being mined that takes that much money to generate. Though, the difficulty is too high as of now but it'll be no problem if the mining rigs out there are powered with renewable energy. Other than that, there's no real correlation regarding the sudden price spike with this news.

It could also be a reason that Bitcoin is rising, but we don't know exactly what it is, sometimes when the price rises without any good news but when there is a lot of good news, the price goes down. I think this market cannot know in advance what happens when it increases or decreases.

The reason behind Bitcoin's price changes is undefined and we can't figure the exact reason out. There will always be conclusions and speculations but that's part of its volatility. Every event has an impact on its price and it can be a positive or negative effect. There will surely be more events that would influence its price soon.

The rebound was down to short positions closing (by buying bitcoin) as traders close their books prior to Christmas. Yesterday was Friday, for many the last working day before Christmas.

Nobody wants to be worrying about open positions while they are eating their Christmas dinner.

Normal trading will resume after the New Year!

We have had many rebounds and they all failed miserably, especially the one where the price pumped from $7.3k to over $10k. If you fall below $7.3k after such a bullish move, that's ultra bearish. There is no way to describe it differently.

Do I think that we have had the worst of the selling? I believe so, but that doesn't mean that we can't drop further. We haven't yet seen a capitulation candle that generally gets most of the weak hands shaken out similar to the one of last year.

I don't see much logic on that, all I know is the holiday has a big impact is the market condition, people are selling their shares because of the holiday and the coin made a rebound because people are looking on the coming year as the best time for another all-time high and so they are buying these dips, I expect the price to go up to $7500 before the year-end.

There is no relation of mining Bitcoin with the price of Bitcoin. Panic sellers caused the market to go below $7k, which was an opportunity for the whales.

They bought it and hence you can now see the price above $7k.

has nothing to do with mining costs, even though their income will be less than the previous income, but do you think miners have ever bought bitcoin or just mine it and incur costs for mining, the price of bounce back yesterday is a reflection where if you understand the chart analysis you might will understand the reflection of the price from the point where buying support is located, this is called a rebound, not a matter of mining costs

Do you mind pasting the Forbes article? I don't think that the mining price is only that - some friend said that it is currently around $9k for chinese miners. However I wouldn't attribute price rises to miners, but to the imbalance between buyers and sellers.

Like how are you linking the cost of mining with the price if bitcoin? I don't see any relation over here. Just because the average cost of mining is $6,300, the price jumped above $7,300? This makes no sense at all. Its like you are trying to say that the higher the cost of mining will be, the higher the price is going to be. I don't think this is how the market actually works. The mining cost doesn't really affect the price of the coins.

Price spikes because traders realized its over sold so they quickly buy at a low price thinking they're getting in for cheaper price. Holder who panicked now has to buy at higher price, that's a sanction for trying to join the manipulation of the market.

If in days the price will once again dip, the weak hands will just get out to save their money. I guess they are too impatient to wait for months before price favors them so they are going to get out. Their sell order will be picked by those who wants to invest more that will lead to sudden price spike again.

According to the miners' calculations, the average cost of mining 1 Bitcoin ranges from 4500-5000$ so the price could even drop further than 6400$. The previous day's recovery was for no reason true, but it is likely that Bitcoin has hit a hard support at 6400$ and thus its price has quickly come back up in a matter of hours.

Almost after every drop people are trying to find reason of this drop.
The truth is simple. Nobody will now real reason. Crypto market is very chaotic

I think someone really need an explanation to everything that's going to happen in Bitcoin even if this is just a quick bounce. I think someone is not too familiar with the bounces that usually occurs in Bitcoin when it is almost breaking down the support. The cost of mining has nothing to do with this bounce, it just so happens that there are traders.

Yeah, it seems that after bitcoin price get crushed and decrease to 6700$, a lot of people tried to buy more bitcoin to support it and make it increase and that's why the price is renounced again to the 7200$ in just few days.

Maybe you're talking about the average cost of mining because in China it's easily below 6k. I once read an article, maybe a month ago, that said Chinese miners would need the price to go below 5000 USD to start capitulating, while in the US the ultimate level is 6500. Of course this would not have to be a spike. to liquidate a farm you need the price to be at a certain level for at least a couple weeks. It's not like these people can't go to a -5% loss for a few weeks, or even months. The workforce needed to shut down a big farm will cost more than 5% of their monthly profit, so they will be reluctant to push the button.

Don't be naive that mining price will stop a bear market. In 2016 it did not and the price went way below mining profitability for months.

I think this is the link of the article.
https://www.google.com/amp/s/www.forbes.com/sites/billybambrough/2019/12/19/is-this-why-bitcoin-suddenly-rebounded-yesterday/amp/

And from what i understand,  bitcoin won't fall in 6,300$ so that some investor buy back again bitcoin because they read this article. 

I just gave up worrying about the price and trying to keep up. You never will. You will never know what caused any of this, only speculate after the fact which means you get nothing out and waste your time. If people really knew these things they would be rich. However, I do think you can play on peoples emotions sometimes. Those are normally hit and miss though. Just try to earn as many coins as you can right now before they go up lots and lots in the future.

I it will always be worth for miners as transactions can not be done without them.

You need addresses to keep transactions active on the network. They also define their own price including exchangers that use their services.

It makes no sense at all of you comparing Bitcoin's price volatility with miners costs. It's not linked to each other.

What's linked is the amount of effort miners take to generate a new block.

There are lot of factors that can affect the price surge of Bitcoin like some whales trying to acquire more Bitcoin or there are new investors that take the dump as an opportunity so its not just about the mining cost. Remember that the Bitcoin halving is coming so I'm guessing that a lot of things will happen and Bitcoin will become more volatile until the halving.

Positive news and Demand over Bitcoin was likely why the price increase happens but I don't have any idea why a sudden change with the price now, and it is not unlikely because of the cost of some mining that it may increase that much, another point Bitcoin will still increase this much because it is volatile and it is not new for it to take a leap like this because of the upcoming year-end and it is predicted that the price will surely return back to $7000 USD so it is not surprising to really return in this price mark.

Why do we have the habit of always finding anything to blame (in case of a dump) and to appreciate (in case of a pump) whenever there is a significant movement in the price of Bitcoin? Plain and simple, this is all about the existing supply and demand thing, nothing more nothing less. As to what spurred the demand, that can be a subject of many debates. Anyway, it is still good to see people and the media talking about Bitcoin and the many things happening affecting the whole ecosystem, that can mean that Bitcoin after all these years is still very relevant.

No, that isn't why.  Bitcoin miners don't need a news report to tell them whether mining is profitable or not.  They're not stupid, you know.

The market rebounded just a little, by the way.  I don't have any clue why it happened, just like I have no idea why bitcoin had crashed to around $6600 before coming back to life.  That just happens in the market, because bitcoin is one of the most volatile things you'll ever see.  Most of the time there's no news whatsoever that would account for any particular movement.

I wonder the same thing, and I've long since stopped trying to find explanations for every little movement.  Things just happen.  Supply and demand, as you said.

That is not the reason, the price needed for the miners to be profitable has no effect at all in the price of bitcoin, why should it? Do you think that traders or investors care about the profitability of miners? They only care about their own profitability and the price recovered simply because they saw a big opportunity to buy bitcoin for a cheap price and they took it, that is it, any miner that at some point stops being profitable has two choices to keep mining or to stop but whatever they choose the market most likely will not react to it.

everything that has positive mean can be the reason of Bitcoin Pumping because we are at bearish market as we can see Bitcoin price is trying to stay in $7k level and that brings burden to the investors that who's looking for some profit this December before the end of the year and also before we enter the halving season next year.and let us hope that at least before we say goodbye this 2019 market goes 9k$ .

Is it really? I don't think so, last 2/1 days, I have seen a lot of people are talking about this issue, I think there is no relationship between these two events, Mining cost is not responsible to get high the price of Bitcoin in recent time, I think Hashrate is the most responsive to this price up and down, It's a common scenario that when the price goes up then the hash rate also goes up and similarly when the price goes down then Hash rate also goes down, That is why Mining cost is not the vital factor to this issue, the most important thing is that Bitcoin price is being manipulated by something.

what you have to realize is that it is a "guess" of "average" cost of mining.
there are two things wrong in this number. first is that it is purely a guess because there is no way you can find the cost of mining since there are dozens of different factors involved from cost of electricity to labor cost, maintenance and access to new equipment. so if we assume the cost is 1000 then it is the average of from 100 to 3000 (just an example to show the range).
and that means the number is a pure guess and completely wrong. usually those who come up with these numbers are using bitcoin's current price with the difficulty to quickly come up with a random number!

there has never been a single case of price being affected by whatever it costs to mine bitcoin and it won't start now either.

I don't really get this, can you link me to the article? I don't really see how the mining fee has anything to do with Bitcoin price rebound. I have been following up with analysis from top analysts, like Dave that predicted last five months that the price was going to drop to $6000 and his prediction is accurate.

He came back recently and said that there is going to be an increase and that bitcoin will be going for a wild run, though some analysts have said it's not true, but I still believe he's right. He also tried to back his analysis with factors that weekly Gaussian channel indicator is bullish and that crypto bounced off the 0.5 Fibonacci retracement level of $3.2k to $13.8k range, which hints at bottoming price activity.

With regard to the mining cost, its effect will be felt not in an instant, it takes time because it needs to undergo market correction first because the halving isn't happening yet, so when the time comes, people will realize that miners are now starting to sell even higher than before and the price will climb slowly but surely. With the recent increase of the market price last day, it is in fact the effect of volatility that we always encounter in the market.

So you are saying that the miners have control over the price as well? I think this varies with how much the country's energy consumption is. I have seen this article [1] (https://www.marketwatch.com/story/heres-how-much-it-costs-to-mine-a-single-bitcoin-in-your-country-2018-03-06). Venezuela has the lowest cost in terms of electricities according to the article.

I think there are more variables and not just miners that want the price to go up, but it couldn't be controlled in my opinion unless you have control over the USD/USDT, you could impact it. I'm just not sure if they can have that price and they made it that way so they could have the "breakeven" to mine 1 Bitcoin.

There are a lot of reasons that can be used to describe why the price of Bitcoin rebounded back  to $7k. But i don't really think this could be the actual reason for that. You should understand that the volatile nature of the entire bitcoin market makes it impossible to actual get one particular reason to be the reason or the cause in either the increase or decrease in the market value of Bitcoin.

There are many reasons why bitcoin suddenly rebounded yesterday about $7,000 maybe the big whales are manipulating the market so that the bitcoin bounce back again from $6,700 and up so that it bounce back again.
Or maybe the main reason is the bitcoin stocks which is getting low and the sellers of the bitcoin don't want to sell their holding bitcoins so that the supply of the bitcoin become high and the current price or value of it becomes reliable and bounce back again. There are so many reasons why bitcoin suddenly rebounded.

I've never really bought into the estimates. I think they're getting better, for sure, but there are still a lot of shortfalls in the calculations. And miners will keep mum about it too, since it benefits them to let people think they're mining at such high cost.

I mean, all the models assume miners immediately sell what they generate. I don't think that's the case at all. Miners speculate quite a bit too, and they hold, batten down the hatches in these times, and flood the OTC markets at better prices or during spikes. I'm pretty sure that's how it happens.

First time I have seen this kind of reasoning.
But it looks too me like it is just a normal fluctuation. I am not really sure of what is the reason behind it so I just put it that way. Which should be what it had always been.

The dump though could be from us holders of bitcoin who are selling for the expensive Christmas or a budget for the end of the year is included.

Nothing to do with that in my opinion. The price rebound because it touched very strong support in $6400-$6500. As simple as that. I don't think any fundamental or news is behind it.

That news that you mention is not a good news for anyone lol, even for miner. And that's not how mining cost could drive the price either. Miner could drive up the cost by holding their Bitcoin thus decreasing the supply/not flooding the market.

even if it has some relationship to the mining cost it is not direct
the only reason it can adjust is because of the less efficient or smaller miners leaving the business
when they do not get enough profit and stop their rigs , the amount of coins they sell immediately drops and the price , in theory , should go up since there is less selling pressure
in reality , though this is just a theory and I don't think anyone has conducted research as to how many miners are selling their coins straight after they mine them to cover the electricity costs etc.
and it is a process , we do not wake up one day and see the price go up or down because John stopped selling , many other factors are influencing it more

i think it is much better to say that manipulators are the reason for the Bump and also the dumping because it is very obvious that they are just playing the market and all of us a just a tool for them to bag money.
i also dont think that we can have any idea of what is really happening behind the scene and all we have is speculations.

I agree that this has no connection with the price at all. As an investor if the price falls down, we find a great timing to invest and seeing the price at $6K is enough to reinvest and maybe that is the reason the price rebounded.

That would not be a reason.
The greatest reason is people realized bitcoin is now in one of the lowest price and wanted to buy it cheap. This could be one of the rare price to get bitcoin below $7K. With the halving coming in May, people are looking for a quick profit.

That would seem to support the fact that it is profitable to mine Bitcoin, but that is an average cost. It really depends on what you paid for you equipment and how efficient it is.  Also it depends on the energy cost where you are mining.

I think big miners will drop the price to $4,000 or less precisely to try to make small miners give up. So i don't think the cost of production has any relation with the last rebound

This is a classic move by monopolies, they can sustain losses for far longer than any small business driving them to sell their operations to them and then making the prices to go up again, and since they can do this at will then they can prepare for that scenario and store a lot of coins and prepare themselves and suppress the price for months and maybe even for a full year driving most small miners to bankruptcy while they laugh at us and our inability to comprehend what it is actually happening.

Some one monopolies about bitcoin to buy and invest where can make bitcoin suddenly pump without we understand why, not have good information with bitcoin will accepted in some country but how come just few minutes bitcoin can raise change about 8% and how come can make bitcoin have higher price. Always have some one want to make people buy bitcoin during price is up.

If we are thinking of huge market hodlers who could control the bitcoin market, we are correct. They do really have the power to make the market dump and pump but not just all by themselves, we are also subject to the volatility we are experiencing. Believe it or not, we are selling and buying each time they make the market alive. And with the whales, we are all contributing to the changes of the market price. In addition, huge advertisement could also manipulate the market.