Bitcoin Forum

It's now only 2.5 bitcoins. What's the factor?

Well maybe this world is running out of idiots buying overpriced asic products.  :-[

Anyone aware?

Perhaps price of new hardware is so cheap? Competitors?

There's a lot of speculation as to why this is happening, but from what I can gather the sentiment is that it's one or more of the following factors:

• A whale panic sold a large chunk, adding additional downward pressure
• Despite operating almost exclusively in BTC, people evaluated the security with a peg to some fiat amount. As BTCUSD rises, people need less BTC invested to hit a specific fiat valuation
• Shaken confidence over network difficulty and competitors
• Many other theories...

In the end, it's a free market with supply, demand, and lots of externalities.

Research and development costs as well as manufacturing setup costs being paid for by the initial batch can allow for cheaper products after they have been recouped by the initial product sales.

Maybe someone did the math and realized that a garage business selling legacy technology chips among an increasingly competitive market for a highly specific niche purpose - that purpose being a highly speculative and experimental digital currency that is itself among the most risky investments possible short of gambling - maybe isn't worth the hundreds of millions of dollars that the stock price implied.

That's why I sold mine weeks ago, in any case.

I dont know why people are selling asics on bitmit at 10x the original price, i mean a butterfly labs jalapeño 8.5 ghs at 1,900 usd. i think that the one who cost 2,000 usd in the website is the 600 ghs bitcoin mining card. the price of the jalapeño is $274 usd, maybe if you have it in you hands you can sell it at twice $548 but no more.

Are the AM shares in the whole venture, or just in that product generation? If the former, then ixne has the definitive answer.

The former, so no.

The price reduces around 50% every 2-4 weeks, cause the diff is raising, and the market is small.

the equipment is getting obsolete too fast

Dividend Yield Estimates
(calculated using 2.9106/Share)
Based On   Paid   Est Annual %   Est Annual BTC
30d   0.07605576    31.79%   0.92534508
90d   0.30360484    42.3%   1.23128629
174d   0.58593483    42.23%   1.22911616

A healthy return if you plan to do nothing with your BTC.  Once ASICminer brings out next generation chips (which I have to assume is in the pipeline) they will probably dominate again as they have a proven record of delivery...

Of course it should be that price.

and even the current price is overvalued.

There are more and more places to put your investment btc every day. People will put them where they believe they will get the greatest return within their own risk tolerance.

Unfortunately, most people will be wrong most of the time.

I can think of dozens of reasons why AM is underpriced, and dozens why they are overpriced. If you can't do that you are just handing your btc to people who can.

Everyone thought himself as investor, but most of time them were destined to be speculator.

It's not a secret that when the BTC price goes up the value of the stock goes down.

Think of it like this. A snickers bar today is worth $1.00. If the value of the dollar doubles that means you can buy 2 snickers bars for $1.00. If the value of a dollar halves then you need $2.00 for 1 snickers bar.

People don't understand that. BTC goes up, they see ASICM going down a little bit. They panic and sell, then you get to buy up cheap shares

+1

Obsolescence would imply there is a better technology available. 

I invested quite heavy in AM, I bought the BTC and then immediately bought AM, and kept track of the performance in $ terms. i'm holding a loss, but its not TO bad now that bitcoin has shot up a bit. I hope AM keeps up the good work, and this temporary slum is just temporary.... another reason for the fall could be the low dividend payout  for the last 2 weeks, It would seem the stock price is such that the dividends come out to ~25-30% / year.

people are finally staring to realise that current prices are far too high. People buy these things to make money.If its easy to see that there isnt any money to be made at that price then people just wont buy them

plus with more competitors coming in they will naturally try to beat each other prices

The answer is simple:

Rising difficulty from increased competition.


It should have been obvious to any early ASICMiner investor that there was no way their dividends could last forever.

The only reason why ASICMiner was so successful was because both BFL and Avalon had serious delays in shipping so ASICMiner pretty much dominated mining.

And since people were desperate to get their hands on any miner and ASICMiner hardware was the only hardware available they did very well with hardware sales.

But now we have KNCMiner, Bitfury, and HashFast at least beginning to ship (bitfury already is), BFL is shipping, and Avalon is shipping their discrete chips and difficulty is soaring. All the new companies have better technology that is faster and consumes less power.

ASICMiner doesn't have a large piece of the pie anymore. And it obvious that it is only going to shrink further. And the smart investor sells BEFORE their piece shrinks in order to get out before everyone else. Ideally you sell at the peak, when things seem to be going well. I wanted to sell at 5.00 but it never really got there. I ended up selling my 100 shares at an average of 4.10 or so, which still isn't bad but I was a little late.

For those of you still sitting on your shares hoping for a huge profit, it's not going happen. The time a mining company will be profitable is always limited. At the best, a mining companies profits will always be cut in half every 4 years due to the block halving. Timing is everything. No mining company has a business model that is viable for consistent long term profits. It's all about making a quick buck and getting out.

I'm holding it long term, i'm thinking in the end he will still be one of the top miners / ASIC producers.

and thats all that really matters...

The idea here isn't to make a quick buck, it's to own a piece of the bitcoin mining industry.

a blocks total TX fees, will increase with time this should compensate somewhat for the reward halving. We might have a few hard months ahead but in the end bitcoin mining will prove to be a profitable venture, i think.

You need to prove what you are saying.
Avalon is not shipping the chips (4 batches maybe? and late)
KnCminer is still not shipping
Hashfast neither
BFL lawl.

ASICMINER is still the only mining company without preordered hw.

There is a private mining pool that added 100 TH/s in the past week or so. People are speculating it's Bitfury chips.

Cointerra claims they will add 2 PH/s in December.

Bitfury is already out there and the others are coming soon.  There is no question that the difficulty is still increasing exponentially and it looks like it will continue, at least for the next 6 months.

ASICMiner will have a very hard time keeping up, especially with their old technology.

Transaction fees will not increase that much in the next 3 years when the next halving takes place.

Currently, transaction fees are 0.59% (for today) of the block reward or about 0.1475 BTC. For there to be enough transactions to make up for the 12.5 BTC we will lose with the next halving, we would have to have roughly 85 number the transactions we have today!

I don't doubt that will happen someday if Bitcoin really succeeds. But it isn't going to happen in the next three years.

Here is the bad part though: Let's say we actually had 85 the number of transactions. The easiest way for that to happen is if 85 times as many people started using bitcoin. Well, then bitcoin would be essentially 85 times as popular and there would be a HUGE surge in its price. At that point 1 BTC would easily be worth a couple of thousands of dollars. So what would happen to the transaction fees? If they stayed at 0.0005 what was once a $0.05 fee now is 50 cents or a dollar or more! The transaction fee would be dropped to compensate, probably to 0.0001 or even 0.00005. This would have the effect of the block reward transaction portion to drop by 5 or 10 or so. So that 12.5 BTC transaction reward is now only 2.5 BTC or 1.25 BTC.

There is no way transactions can ever make up for the block reward halving, at least not in the next couple of decades.

yea but... if it is 85x more popular, let us for the sake of easy argument say btc price is 85x higher, then it all still works out even with the reward drop, you are making as much if not more money in real terms

I would say primarily it is because:

A. ASICMiner is not the only game in town anymore. A literal boat load of chips is starting to drop from a variety of new producers, with actual competition ASICMiner must respond to stay competitive. There are now many more IPOs to invest into and speculate on.

B. Skyrocketing hashrate/difficulty is likely turning off potential miners to the market as a whole, a lower price for the gear combats this with a better ROI potential (though not much of one)

I have to agree, they probably have new hardware soon to be announced, difficulty making things not so appearing on the ROI side.    At least they are delivering unlike BFL clown crew.