On: The Comparison Of Difficulty VS Price

[Isaac_]

I'm no expert, but there is an observation that is quite evident that I would like to share with you guys.

Why isn't this image working? I'm using the proper [tags] which is img and /img?

https://i.imgur.com/MC63QlV.jpg

sources: https://data.bitcoinity.org/markets/price/5y/USD?c=e&t=l & https://data.bitcoinity.org/bitcoin/difficulty/5y?t=l

It seems that the only true bubble bitcoin had in terms of price compared to difficulty (mining being overly profitable and price of bitcoin being higher than its normal value in diffuclty) happened between 2013 and 2014, and price of balance relative to difficulty.

The last years however, price has been directly correlated to difficulty.

With difficulty expected to rise exponentially at this rate, prices are expected to keep going up as well.

Don't think this is just a bubble price, this is just the beginning. You cannot compare 5 year difficulty chart vs 5 year price chart and not see a correlation. Just look.

Don't sell!

[1715682800]

1715682800

[Isaac_]

I would like to add, a perspective on value.

Let's take physical mining for example, there is cost of labour, machinery, renting or buying the lands, and probably a bunch of other costs. These all add up to create the bare minimum value of the (for example, iron) being mined. On top of that, for the efforts to be worth it, people have to add an extra cost to all processes of mining and even further if they are middle men for the goods being mined to be worth the time and effort to mine.

That'll be all.

[13abyknight]

Pretty accurate comparison in the graphs as the proportionality is being seen establishing between difficulty and price. Just wondering how much the price would've surged when we near the maximum circulating supply with all the exponential increase in difficulty, wish I would be alive to see that day.

Either ways, that spike in 2013-14 was an indicator that many people learnt about Bitcoin and cryptos which suddenly increases the demand and prices went off charts. Of course it fell off after a bit of time but nothing sketchy since its back on par with the difficulty graph.

[squatz1]

While I do think there can be some correlation here, I do think this is more of something to try to convince more and more people to hold Bitcoin before a correction comes in. Because if you are to think logically, without any graphs or anything of that nature in mind you'd come to think that this price is astronomically high-- this is something unforeseen.

You can't say this isn't going to come crashing down at some point, the question is when NOT IF.

Also, the difficulty rise comes from the price rise -- as more and more people mine when it's more profitable to mine (as the price is up, it is more profitable to mine) So this isn't helpful in the least.

[trecore4]

With that assumption I’m buying more bitcoin then. But I never had the difficulty calculation in my consideration to decide the ultimate fate of the bitcoin. I always think that difficulty should be concerning factor to miners who are doing those operations and they have to watch for the difficulty stuff on what their profitability is completely dependent. You can say that bitcoin transaction fees might get disturbed with increasing difficulty but not the price itself.


The prices are rising because of the market capitalism and that is what being taught me by many of the articles that I keep reading. Correct me I’m wrong with that presumption. Because if thats the case then its really affecting and now the market cap stands all upto 200B+ level. Everyone now says that this is the real bubble etc, but whom to trust really as everyone creating different bubble about different things.

[cryptolopoly]

Yeah this is correct. Anyone who says otherwise and mindlessly says "bitcoin is a bubble" is pretty ignorant and is generally someone who ignores the facts that are staring them at the face. It's not hard to learn about bitcoin, its technology, and its potential for the future. There are lots of simplified explanations even on youtube if you don't want to read. It's all about actually doing something and learning about it rather than just calling it a damn bubble. Bubble brains.