Bitcoin price will be deflated!!! by block halving!!!!!

[n2004al]

Reading the article i don't find any word about the deflating. So i don't understand the title of article. His article end with this phrase which is and the conclusion of it:

"What we can tell from this purely theoretical analysis, though, is that aside from speculative price fluctuations, Bitcoin’s approaching halving will likely be anti-climactic at best, and very troubling at worst."

So nothing new under the sky. I think that the article is a good analyse but without end. Must annalists can enumerate the facts which he wrote in its article. The problem is that are few or no one which at the end write if the price will be deflated or not. This is important for the people and above all for us bitcoiners. Maybe the price will go high because will be produced less coins but this can be discussed. People can lose its interest for bitcoin exactly for this fact. So this fact can go dawn the price. In few words: the author of the article has right in one thing. We might wait trouble.

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[Q7]

While there are few possible scenarios with accompanying facts to support each of it pointing to either a price increase or price decrease which we can't possibily predict for sure...one thing that will be good for bitcoin would be that volatility will start to tone down. With less supply getting generated for every block solved, whether the miner decides to hold on to it longer or dump it immediately to the open market, at least after the halving, the guy now has less amount of coins on hand to influence that.

[manselr]

It doesn't matter if it there is a logical argument for or against a price devaluation, at this point the halving is on everyone's mind and make no mistake, there will be movement upwards with the price. Market = psychology game.

[deisik]

It doesn't matter if it there is a logical argument for or against a price devaluation, at this point the halving is on everyone's mind and make no mistake, there will be movement upwards with the price. Market = psychology game.

Market sees the future... And it sees nothing in it

[NorrisK]

It doesn't matter if it there is a logical argument for or against a price devaluation, at this point the halving is on everyone's mind and make no mistake, there will be movement upwards with the price. Market = psychology game.

As long as the demand does not increase I don't think halving will have a big effect on the price.

Especially considering most miners are not even selling that much of their coins, the supply won't also magically be cut in half.

[silverleafy]

It would be odd if the price would drop considerably or stay about the same some time after the halving (say... 10 months afterwards). I think that the article is flawed in saying that the expected rise in price is because of reduction in the circulating bitcoin. That is wrong. Right now, there is a production of bitcoin, some part of which needs to be sold off to pay for mining cost (electricity bills cant really be paid in bitcoin). They have to sell, and that sale pressure holds the price down somewhat. Once the production of bitcoin goes down, that sale pressure will be less, because they'll have only half the available bitcoin to sell for the cost of mining. Those producing bitcoin will have to sell at about double the price if they want the same profit (assuming the cost of mining doesn't really go up). The only way is up after the halving. Maybe not immediately, but I'm pretty sure the price will double (from what the price will be at about the halving), in about a year after the halving.

They will have to sell. Since their earnings will be twice as less (without any economic reason behind) while they still have to pay the same bills, they will have to sell more. Most likely, much more, thereby emptying their stashes. I don't see how the price could double in these circumstances...

So, I'm afraid, the sell pressure may actually increase

Twice as less?... Don't you mean... half? Anyways, their production will be half, not their earnings. The bitcoin price isn't going to remain the same before, during, nor after the halving. Imagine there is a shortage of oil, and some of the oil producing giants have a stash of oil for themselves, what's more likely to happen, that they sell at  higher price (bringing the price up somewhat proportionately to how much the production reduced) or that they sell everything they have at pre-shortage price? You're talking nonsense if you think the miners are going to sell at about this price after the halving. You're talking nonsense if you think they're going to sell at below $500 (about a year) after the halving.
Time will tell. I would make a bet of some sort, but that proves meaningless in these anonymous forums.

[deisik]

It would be odd if the price would drop considerably or stay about the same some time after the halving (say... 10 months afterwards). I think that the article is flawed in saying that the expected rise in price is because of reduction in the circulating bitcoin. That is wrong. Right now, there is a production of bitcoin, some part of which needs to be sold off to pay for mining cost (electricity bills cant really be paid in bitcoin). They have to sell, and that sale pressure holds the price down somewhat. Once the production of bitcoin goes down, that sale pressure will be less, because they'll have only half the available bitcoin to sell for the cost of mining. Those producing bitcoin will have to sell at about double the price if they want the same profit (assuming the cost of mining doesn't really go up). The only way is up after the halving. Maybe not immediately, but I'm pretty sure the price will double (from what the price will be at about the halving), in about a year after the halving.

They will have to sell. Since their earnings will be twice as less (without any economic reason behind) while they still have to pay the same bills, they will have to sell more. Most likely, much more, thereby emptying their stashes. I don't see how the price could double in these circumstances...

So, I'm afraid, the sell pressure may actually increase

Twice as less?... Don't you mean... half? Anyways, their production will be half, not their earnings. The bitcoin price isn't going to remain the same before, during, nor after the halving. Imagine there is a shortage of oil, and some of the oil producing giants have a stash of oil for themselves, what's more likely to happen, that they sell at  higher price (bringing the price up somewhat proportionately to how much the production reduced) or that they sell everything they have at pre-shortage price? You're talking nonsense if you think the miners are going to sell at about this price after the halving. You're talking nonsense if you think they're going to sell at below $500 (about a year) after the halving.
Time will tell. I would make a bet of some sort, but that proves meaningless in these anonymous forums.

Okay, let it be half as much, but I still don't understand what you mean by halving the production (not reward), and how their earnings won't be two times less (shame on you!)...

[silverleafy]

Okay, let it be half as much, but I still don't understand what you mean by halving the production (not reward), and how their earnings won't be two times less (shame on you!)...

Look, the blockchain reward is bitcoin production/distribution. There are new bitcoin coming into the miner's hands every single time they solve a block. Like with anything else (oil, coffee beans, gold, etc), when the production goes down and production prices remain, the price tends to go up. If we use a farmer as an example, say there's a drought... he sells less product, but he still has to make a living; sure, he may have to sell some of his grain stored up in a silo, but (assuming a purely local market) that's not going to affect the price all that much as it continues.
Let's assume the miners are going to have to sell their stashes... are their stashes 25BTC per block mined? Think about it, that is a huge number, and quite ludicrous. How long would their stashes hold the price down?
Look, here's a little timeline of what happened last time the halving took place. Jan-June 2012, prices were bouncing around $7 and $3 (mostly around $5-$6). Aug 2012, price goes up to $16, drops to $7 and bitcoin trades for a price under $9 one last time. Halving day 2012, price doesn't really move from $11-$13, the regular price. March 2013, bitcoin is sold for under $43 one last time.
I'm confident that whatever price bitcoin is at on Jan 2016, we're going to be trading it at double that price (at least) in march 2017. But only time will tell.

[deisik]

Okay, let it be half as much, but I still don't understand what you mean by halving the production (not reward), and how their earnings won't be two times less (shame on you!)...

Look, the blockchain reward is bitcoin production/distribution. There are new bitcoin coming into the miner's hands every single time they solve a block. Like with anything else (oil, coffee beans, gold, etc), when the production goes down and production prices remain, the price tends to go up. If we use a farmer as an example, say there's a drought... he sells less product, but he still has to make a living; sure, he may have to sell some of his grain stored up in a silo, but (assuming a purely local market) that's not going to affect the price all that much as it continues.
Let's assume the miners are going to have to sell their stashes... are their stashes 25BTC per block mined? Think about it, that is a huge number, and quite ludicrous. How long would their stashes hold the price down?

I still don't see logic in your reasoning. You seem to be confusing cause and effect, which is crucial here (as elsewhere). It is not the production that goes down in the first place, but the revenue flow that drops first (twice as much, wtf)...

[deisik]

Look, here's a little timeline of what happened last time the halving took place. Jan-June 2012, prices were bouncing around $7 and $3 (mostly around $5-$6). Aug 2012, price goes up to $16, drops to $7 and bitcoin trades for a price under $9 one last time. Halving day 2012, price doesn't really move from $11-$13, the regular price. March 2013, bitcoin is sold for under $43 one last time.
I'm confident that whatever price bitcoin is at on Jan 2016, we're going to be trading it at double that price (at least) in march 2017. But only time will tell.

Unlike you, I can't possibly ascribe the price increase that happened through 2013 to the halving in 2012, if that was your point, by any means...

There is nothing that could convince me otherwise

[silverleafy]

Firstly, I don't see what bitcoin miners are producing other than bitcoin. Heat, perhaps? Bitcoin can be part of their revenue, but it is their production of it that pays their bills. Let's get this in order: first, their production (they are producing bitcoin and heat, nothing more) drops by 50% on the bitcoin front. Then their revenue is reduced if they keep selling the bitcoin at pre-halving prices (if the halving has not already been priced in, as I think was the case when bitcoin was selling at about $12).
Supply and demand. Supply will be reduced 50%, their demand will possibly increase, probably stay the same... unless something really bad happens, I don't see Bitcoin's price trading at below [insert the double of Jan 2016 price here] March 2017. My point is that I believe that bitcoin will follow a similar patter of a leap in price before the halving, followed by a crash, then a rise again (trading at some prices for one last time).
Litecoin has replicated this pattern, a pre-halving pump to about $8, followed by a dump all the way down to $3. It's remained under $3 afterwards, but I'm confident it's traded for under $2 for the last time.
Here's what I think will happen. We'll start 2016 at about $300, there will be a pre-halving pump all the way back to $600, then back down to $400. Afterwards, the price will change in some manner (ether stable or not), until we reach $700-$900 by march 2017. And that price will be the new norm.

[deisik]

Firstly, I don't see what bitcoin miners are producing other than bitcoin. Heat, perhaps? Bitcoin can be part of their revenue, but it is their production of it that pays their bills. Let's get this in order: first, their production (they are producing bitcoin and heat, nothing more) drops by 50% on the bitcoin front.

Why do you continue to persist when it is evident that it is their revenue that would fall first? Not until then miners have any reason to cut production (effort and time wise), since that would mean losing profits. They don't care so much about the amount of coins they produce per block as about the revenue they get per same block...

[silverleafy]

Firstly, I don't see what bitcoin miners are producing other than bitcoin. Heat, perhaps? Bitcoin can be part of their revenue, but it is their production of it that pays their bills. Let's get this in order: first, their production (they are producing bitcoin and heat, nothing more) drops by 50% on the bitcoin front.

Why do you continue to persist when it is evident that it is their revenue that would fall first? Not until then miners have any reason to cut production (effort and time wise), since that would mean losing profits...

OK, we have a misunderstanding based on semantics. Revenue is the money they make. Production is what they make in order to sell and make money. You're confusing production as in "how much they produce" with production as in "how many resources are put into producing bitcoin". Assuming that their efforts at producing bitcoin (time, hardware, maintenance, etc) does not change, what will drop first is how many bitcoin they produce, it will drop 50%. Then their revenue (the money they make) will be affected by what they do with their reduced reward.
What makes more sense for them is to raise the price they sell at, because what they have to sell is a lesser amount, despite the fact that the cost of producing what they sell remains the same.

So the amount of bitcoins produced (production) is reduced by 50% first, and their revenue is affected in some manner, one which I am not comfortable speculating upon.

[deisik]

Firstly, I don't see what bitcoin miners are producing other than bitcoin. Heat, perhaps? Bitcoin can be part of their revenue, but it is their production of it that pays their bills. Let's get this in order: first, their production (they are producing bitcoin and heat, nothing more) drops by 50% on the bitcoin front.

Why do you continue to persist when it is evident that it is their revenue that would fall first? Not until then miners have any reason to cut production (effort and time wise), since that would mean losing profits...

OK, we have a misunderstanding based on semantics. Revenue is the money they make. Production is what they make in order to sell and make money. You're confusing production as in "how much they produce" with production as in "how many resources are put into producing bitcoin". Assuming that their efforts at producing bitcoin (time, hardware, maintenance, etc) does not change, what will drop first is how many bitcoin they produce, it will drop 50%. Then their revenue (the money they make) will be affected by what they do with their reduced reward.
What makes more sense for them is to raise the price they sell at, because what they have to sell is a lesser amount, despite the fact that the cost of producing what they sell remains the same.

So the amount of bitcoins produced (production) is reduced by 50% first, and their revenue is affected in some manner, one which I am not comfortable speculating upon.

Under production I mean the number of new blocks found per unit of time

Nevertheless, now I see your point, though I still find it misguided at best. Miners will produce only half the amount of bitcoins after the halving, but this doesn't in the least mean that the total supply of coins will diminish accordingly since they don't sell all their coins even now (when reward is high), and they are not the only ones who sell bitcoins. Given that a) they can't increase production (i.e. the number of new blocks found per unit of time, which could potentially offset the drop in reward), and b) they may actually begin suffering losses due to lower reward per block (I don't expect their profit margins to be high due to tight competition), I see it as mostly inevitable that they will have to sell more coins than they sold before the halving (i.e. now sell), in order to cover their expenses (which remain the same per block)...

In short, it is not as linear as you think it is

[silverleafy]

OK, cool. How do you think the price will behave between now and 2017? What role do you think that the halving will play during that time?

[deisik]

OK, cool. How do you think the price will behave between now and 2017? What role do you think that the halving will play during that time?

I have two scenarios (provided that Bitcoin halving is not canceled or otherwise meddled with, of course). The first (let's call it an optimistic one, lol) assumes that nothing substantial changes in the long run after the halving (beyond the usual short-lived paroxysms of pumps&dumps), the second (a pessimistic one, wtf) assumes that miners actually begin suffering heavy losses, mining is paralyzed (until the difficulty drops a few times), panic sell sets in (started by miners liquidating their stashes and jobs), price collapses to below $100 and levels off at about 50 dollars per coin...

[chennan]

OK, cool. How do you think the price will behave between now and 2017? What role do you think that the halving will play during that time?

I have two scenarios (provided that Bitcoin halving is not canceled or otherwise meddled with, of course). The first (let's call it an optimistic one, lol) assumes that nothing substantial changes in the long run after the halving (beyond the usual short-lived paroxysms of pumps&dumps), the second (a pessimistic one, wtf) assumes that miners actually begin suffering heavy losses, mining is paralyzed (until the difficulty drops a few times), panic sell sets in (started by miners liquidating their stashes and jobs), price collapses to below $100 and levels off at about 50 dollars per coin...

Yikes.. that pessimistic view is a very dire one.

Let's say that were to happen, how much of the bitcoin community will completely fall off in your opinion? I think if bitcoins price were to drop to $50 and the debate of block size still rages on, I would think probably at least over 25% of the community would sell all of their bitcoins, mining hardware, etc. and just move on...

But at the same time I could see that some people would want to stay in the game and hope that the core dev team can implement something which would ease the blocksize debate and give miners more reason to mine even harder... These next couple years are going to be absolutely ridiculous to watch bitcoin prices fall and rise.  Personally I would just be happy if the price would stay at $230 lol.

[edric]

I found this article and it is so much convincing, check it out

http://insidebitcoins.com/news/the-bitcoin-halving-deflating-the-hype/35014

Great article.  It's convincing and I agree with most of the points.  One thing it unfortunately doesn't address is the XT versus core debate and how that will affect everything.  I'm worried about that and it's a big issue.

Check out this article...

http://wallstreettechnologist.com/2015/08/19/bitcoin-xt-vs-core-blocksize-limit-the-schism-that-divides-us-all/

[deisik]

OK, cool. How do you think the price will behave between now and 2017? What role do you think that the halving will play during that time?

I have two scenarios (provided that Bitcoin halving is not canceled or otherwise meddled with, of course). The first (let's call it an optimistic one, lol) assumes that nothing substantial changes in the long run after the halving (beyond the usual short-lived paroxysms of pumps&dumps), the second (a pessimistic one, wtf) assumes that miners actually begin suffering heavy losses, mining is paralyzed (until the difficulty drops a few times), panic sell sets in (started by miners liquidating their stashes and jobs), price collapses to below $100 and levels off at about 50 dollars per coin...

Yikes.. that pessimistic view is a very dire one.

Let's say that were to happen, how much of the bitcoin community will completely fall off in your opinion? I think if bitcoins price were to drop to $50 and the debate of block size still rages on, I would think probably at least over 25% of the community would sell all of their bitcoins, mining hardware, etc. and just move on...

Honestly, I don't know and don't want to speculate. I say only what I actually consider as possible, to the extent that I take measures to prevent losses and earn some profits by this, if it ever comes to that...

I also deem it possible that the halving will really be changed

[BTCPOOLMINING]

I don't think price will go down because of halving but I am sure we won't see the big hype as we seen in 2013 after halving