Bitcoin halving

[uki]

If we have constant influx of fiat and constant influx of bitcoins, they would form an equilibrium price. If bitcoin influx halves and nothing else changes, the equilibrium price will double.
So reward halving will cause price doubling.

Unfortunately, there are number of assumptions in this reasoning. We assume that influx of fiat won't change. We assume that price is currently fluctuates around the equilibrium. Both of these assumptions are wrong. Influx of fiat can change tenfold, any direction (up, down or sidewise ). Rally/crash can move price very far from the equilibrium. And even influx of bitcoins can change - miners can stop selling or long-time holders will decide to sell.  Scale of this can be order of magnitude more, than the halving. Halving can change prices twofold, while a rally - twenty-fold.

Having said all this, we can still assume, that halving will double the prices. When? IMO, earlier than in 15 months time. But it won't look like sharp doubling. Because of this: Say, you are a miner. You are selling all coins you produce straightaway, to cover running expenses and interest. But if you know that the coin price will double in a year, it would make sense to borrow money and pay from them, while saving the coins. If you borrow even at 20% p/a it already makes sense to stop selling coins now and get 80% profit from it. The same is true about speculators. They should start accumulating already. So it is possible that the doubling is already priced in.

IMO, it is not yet priced in, because 15 months is an eternity in the bitcoin world. Borrowing for the eternity is too risky. So, the price doubling will happen somewhere early next year and will be very gradual, maybe not even noticeable on the background of rallies and crashes.

Agree on that. And that is also, I believe, what people behind ETF may be thinking. They will introduce it early enough to profit from the halving effect, just as you described. That may help with money inflows, and thus, further increase the price.

[SirChiko]

BTW this thread seems to be more fitting in the mining speculation board.

I think it's speculating more on the impact on the space in general.

It's still quite a way out so I wouldn't want to guess what'll happen. There might be new generations of machinery or miners might go all out to cut costs such as setting up in places with geothermal energy etc.

I would've thought the market would've priced it in long before it happens but you never know.

Is defendly a big deal for farms and big mining operation, either they cut their power consumption and miner cost in halve or the are pretty much done.

They will be done IF btc price won't increase but it may happen and then boom.
But i'm sure smaller miners will have to stop if price won't atleast doule, even better triple!
Also by these sentences you can already see that i belive bitcoin will rise after next halving.

[ensurance982]

BTW this thread seems to be more fitting in the mining speculation board.

I think it's speculating more on the impact on the space in general.

It's still quite a way out so I wouldn't want to guess what'll happen. There might be new generations of machinery or miners might go all out to cut costs such as setting up in places with geothermal energy etc.

I would've thought the market would've priced it in long before it happens but you never know.

Is defendly a big deal for farms and big mining operation, either they cut their power consumption and miner cost in halve or the are pretty much done.

They will be done IF btc price won't increase but it may happen and then boom.
But i'm sure smaller miners will have to stop if price won't atleast doule, even better triple!
Also by these sentences you can already see that i belive bitcoin will rise after next halving.

Miners still make a profit at current prices with current hardware and current electricity costs. At least the miners having access to cheap mining equipment and big amounts of electricity. Many smaller miners will turn their equipment off when the halving occurs.

[Amph]

BTW this thread seems to be more fitting in the mining speculation board.

I think it's speculating more on the impact on the space in general.

It's still quite a way out so I wouldn't want to guess what'll happen. There might be new generations of machinery or miners might go all out to cut costs such as setting up in places with geothermal energy etc.

I would've thought the market would've priced it in long before it happens but you never know.

Is defendly a big deal for farms and big mining operation, either they cut their power consumption and miner cost in halve or the are pretty much done.

They will be done IF btc price won't increase but it may happen and then boom.
But i'm sure smaller miners will have to stop if price won't atleast doule, even better triple!
Also by these sentences you can already see that i belive bitcoin will rise after next halving.

Miners still make a profit at current prices with current hardware and current electricity costs. At least the miners having access to cheap mining equipment and big amounts of electricity. Many smaller miners will turn their equipment off when the halving occurs.

this could lead to a potentially 51%, if the price decrease too much and for much time, because at that point even large farm will turn off their miners, and only the largest farm will prevail resulting in the infamous 51% that we all know

[ensurance982]

BTW this thread seems to be more fitting in the mining speculation board.

I think it's speculating more on the impact on the space in general.

It's still quite a way out so I wouldn't want to guess what'll happen. There might be new generations of machinery or miners might go all out to cut costs such as setting up in places with geothermal energy etc.

I would've thought the market would've priced it in long before it happens but you never know.

Is defendly a big deal for farms and big mining operation, either they cut their power consumption and miner cost in halve or the are pretty much done.

They will be done IF btc price won't increase but it may happen and then boom.
But i'm sure smaller miners will have to stop if price won't atleast doule, even better triple!
Also by these sentences you can already see that i belive bitcoin will rise after next halving.

Miners still make a profit at current prices with current hardware and current electricity costs. At least the miners having access to cheap mining equipment and big amounts of electricity. Many smaller miners will turn their equipment off when the halving occurs.

this could lead to a potentially 51%, if the price decrease too much and for much time, because at that point even large farm will turn off their miners, and only the largest farm will prevail resulting in the infamous 51% that we all know

Ha yeah, but I bet by now the big mines are smart enough to spread their hash rate across various pools so it doesn't appear as if their hashing power is under the control of a single entity...

[Pecunia non olet]

With Bitcoin halving soon does that mean the price of Bitcoin has to double or is mining just going to stop. Another thought is mining is going to get more efficient. What are some of your thoughts on this matter?

either price doubles or hashrate declines - or price goes up a little and hash goes down a little (what i think will happen).

Litecoin will halve in a few months btw. Far earlier than btc.

[Holderbert]

If we have constant influx of fiat and constant influx of bitcoins, they would form an equilibrium price. If bitcoin influx halves and nothing else changes, the equilibrium price will double.
So reward halving will cause price doubling.

Unfortunately, there are number of assumptions in this reasoning. We assume that influx of fiat won't change. We assume that price is currently fluctuates around the equilibrium. Both of these assumptions are wrong. Influx of fiat can change tenfold, any direction (up, down or sidewise ). Rally/crash can move price very far from the equilibrium. And even influx of bitcoins can change - miners can stop selling or long-time holders will decide to sell.  Scale of this can be order of magnitude more, than the halving. Halving can change prices twofold, while a rally - twenty-fold.

Having said all this, we can still assume, that halving will double the prices. When? IMO, earlier than in 15 months time. But it won't look like sharp doubling. Because of this: Say, you are a miner. You are selling all coins you produce straightaway, to cover running expenses and interest. But if you know that the coin price will double in a year, it would make sense to borrow money and pay from them, while saving the coins. If you borrow even at 20% p/a it already makes sense to stop selling coins now and get 80% profit from it. The same is true about speculators. They should start accumulating already. So it is possible that the doubling is already priced in.

IMO, it is not yet priced in, because 15 months is an eternity in the bitcoin world. Borrowing for the eternity is too risky. So, the price doubling will happen somewhere early next year and will be very gradual, maybe not even noticeable on the background of rallies and crashes.

What he said

[Lauda]

Well it actually depends on the events and the situation in which this occurs. We might see something very bad happen on the way (hopefully not), which would cause another loss of confidence.
If we're looking a just basic supply and demand, if nothing changes then there will definitely be a price rise after the halving.

If you want to keep track of the time: http://bitcoinclock.com/ .

[RodeoX]

It's OK that bitcoin is halving. There are websites that can double it back to normal! 

[ensurance982]

It's OK that bitcoin is halving. There are websites that can double it back to normal! 

Huh!?!? Reminds me of that one time where Blockchain.info was having the sniffles/hiccups: It showed avery balance multiplied by two, or something. Other charts were off, as well.