does mining cost affect btc price?

[lidd0512]

there was a saying is that ,btc's price can not drop down bellow its mining cost.e.g,if btc's mining cost is 5000 $,btc cant drop bellow 5000 $,if the price is lower than 5000$ ,the mines could be paralysised ,so btc transacion cant work either.the statement sounds reasonable.to avoid this situation ,btc's price must be above its mining cost.
On other hand, the difficulty of mining btc is growing harder and harder ,if one day the mining cost goes up to the moon ,e.g, 100,000,000 $,would the price of btc  also go to that level of price?but the height of price cant be maintained that high,people would of course change their btc to fiat currency,so i think its quite contradictory to ballance btc price and the mining cost.what do you think of this paradox?

[1714889880]

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[1714889880]

1714889880

[Random Seller]

I don’t think that correct.

The difficulty of mining bitcoin has been climbing rapidly for the past 30-45 days. And I don’t see the price going up for bitcoin.

[monkeydominicorobin]

there was a saying is that ,btc's price can not drop down bellow its mining cost.e.g,if btc's mining cost is 5000 $,btc cant drop bellow 5000 $,if the price is lower than 5000$ ,the mines could be paralysised ,so btc transacion cant work either.the statement sounds reasonable.to avoid this situation ,btc's price must be above its mining cost.
On other hand, the difficulty of mining btc is growing harder and harder ,if one day the mining cost goes up to the moon ,e.g, 100,000,000 $,would the price of btc  also go to that level of price?but the height of price cant be maintained that high,people would of course change their btc to fiat currency,so i think its quite contradictory to ballance btc price and the mining cost.what do you think of this paradox?

It is the other way around. As simple as that.

[penig]

Its a view based on simplistic view of economics, making assumption that miner wont run at a loss.  This overlooks firstly that they are running a loss from day 1 to day n when they break even on capital outlay, secondly miners could anticipate future increases (so recovering loses later) and thirdly that running a small loss to cover some costs is better than not running at all.

[Pursuer]

that is mostly speculation and only partly might be true as miners may not let the drop go on by doing some manipulation or something like that. but generally how much it costs to mine depends on the difficulty and nothing else.

it is actually pretty simple if you look at it like that. imagine if price was $100 and mining bitcoin could give you $110. assuming you have no cost, it barely is profit.
now imagine if price was $100 and mining bitcoin could give you $500 profit. what would have happened was that a LOT of people saw this profit and started mining until difficulty went up and profit became $110 again.
and guess what, difficulty has been rising as the price rose last year from $1000 to $20000 which shows a LOT of people saw that profit and started mining. the hashrate grow:
https://blockchain.info/charts/hash-rate
https://blockchain.info/charts/difficulty

[Jet Cash]

Miners selling coins to cover costs could affect the price of Bitcoin.
Mining costs could influence the transaction fees more than the price of Bitcoin imho.

[nsasuiteb]

I heard that bitcoin mining difficulty is adjusted after a certain number of block so it is not a problem for miners. If bitcoin price goes lower, then mining difficulty will be adjusted. I don't know how long it takes to adjust the mining difficulty.

[dasher797]

Yes of course, the more profit that minner bitcoin get the more people want to be bitcoin minner the more people who interested to bitcoin then the price of bitcoin will be increase, its about sentiment, if people think that there are many good potential in bitcoin then people will buy bitcoin thwn cause to the increasing price of it.

[shulio]

It will affect but not that much. It can only determine the lowest bitcoin price, not the highest value of Bitcoin.

[Support1bbot]

Better believe it some anticipated that it will develop till it hits 100k. Idk truly what will happen on the off chance that we are talking factually that number is valid on the off chance that we endeavor to anticipate utilizing the numbers we have now it will achieve 100k yet idk know whether that model contains the imperatives that may happen if BTC hits high costs.

[trickyriky]

Miners selling coins to cover costs could affect the price of Bitcoin.
Mining costs could influence the transaction fees more than the price of Bitcoin imho.

This is close to truth. Additionally mining as the method of getting crypto is becoming less profitable each coming day. Today miners can earn a bit only if they use expensive mining farms.

[Catmony]

Miners keep shifting from one coin to another just like investors do when bitcoin's price goes down or up. Miners will always mine the coin that is profitable for mining s mining cost is quite unlikely to affect price directly.

Its price mostly depend upon demand because supply is always limited regardless of number of miners mining it. 

[ACCOUNTSTRADER]

I think that yes, of course.

[mahibul49]

no but mining cost make bitcoin legit.bitcoin mining is not free so bitcoin is legit and future of money.

[daarul50]

there was a saying is that ,btc's price can not drop down bellow its mining cost.e.g,if btc's mining cost is 5000 $,btc cant drop bellow 5000 $,if the price is lower than 5000$ ,the mines could be paralysised ,so btc transacion cant work either.the statement sounds reasonable.to avoid this situation ,btc's price must be above its mining cost.
On other hand, the difficulty of mining btc is growing harder and harder ,if one day the mining cost goes up to the moon ,e.g, 100,000,000 $,would the price of btc  also go to that level of price?but the height of price cant be maintained that high,people would of course change their btc to fiat currency,so i think its quite contradictory to ballance btc price and the mining cost.what do you think of this paradox?

The mining cost is very little to affect the bitcoin price because the more affecting the bitcoin price is the market condition of the crypto. If the market conditions more and more enthusiasts and supply a coin dwindling then the price of a coin will soar, as it is the law in the economy. However, it is fair to say that mining costs can be the benchmark for the minimal price of a crypto especially bitcoin because with the blockchain technology applied all the bitcoin transactions are processed by the miners so that if there are no miners it may not be validated. Then with that, we must know in advance how the basics of work and transaction process of a crypto with the technology.

[Arngrim]

that is mostly speculation and only partly might be true as miners may not let the drop go on by doing some manipulation or something like that. but generally how much it costs to mine depends on the difficulty and nothing else.

it is actually pretty simple if you look at it like that. imagine if price was $100 and mining bitcoin could give you $110. assuming you have no cost, it barely is profit.
now imagine if price was $100 and mining bitcoin could give you $500 profit. what would have happened was that a LOT of people saw this profit and started mining until difficulty went up and profit became $110 again.
and guess what, difficulty has been rising as the price rose last year from $1000 to $20000 which shows a LOT of people saw that profit and started mining. the hashrate grow:
https://blockchain.info/charts/hash-rate
https://blockchain.info/charts/difficulty

I agree with this. Besides if they all surrendered with the difficulty there is a lot more people who are now mining other coins will take over.
They cannot do it because of that difficulty.
Someone made this clear to me. He is now mining Zcash I think.
Bitcoin mining needs a high powered hardware now. But with all of them gone it will be an easier path to others and will give them opportunity to have bitcoin.

[oddwh]

No, in fact the price can drop below the mining cost. If this happens, some miners will stop or reduce mining and the difficulty will be reajusted. Don't forget too that the mining cost isn't the same in all countries, so some countries will stop mining before some others.

Currently, with a block reward of 12.5 coins every 10 minutes, 1800 BTC are created every days, which is worth 14400000$ at 8000$ per coin. We can't compare this with daily transaction volume, because daily transaction volume isn't the real amount of money invested every days.

You might know too that we didn't needed 141bn$ to get the 141bn$ market cap, real whole amount invested in bitcoin is much lower. In this article, the author calculated we had around 10bn$ really invested in cryptocurrencies: http://jamescrypto.com/the-difference-between-inflow-and-market-cap-and-how-it-relates-to-tethers/

Anyway, the market must afford 14.4m$ of sold coins everydays, this doesn't seem that much but if you multiply by 100 days, you'll see that we are at 1.4bn$, which begins to be a big number versus these 10bn$ total investment. This is is why you can consider that indeed, mining cost must be influent for BTC price.

[Beefcake]

I also think it is the other way around.  Mining costs mysteriously rise with the price of bitcoins.  Mining gear specifically.  They are sold not by cost to make them, but by how much people are willing to pay.  So if the price of bitcoins goes up, mining machine demand rises sharply, more are produced, network difficulty rises, etc. 

If mining cost surpasses price, then miners would either mine at a loss and hold coins to sell in the future, or switch to a different coin that is still profitable.  Some will switch and network difficulty goes down, also fewer people want machines.  So the network self adjusts.  I am not an expert on mining, but I would expect in the long run that equipment costs would come pretty close to expected returns, because if it didn't more people would mine (thus reducing profit etc.)

[joebrook]

I don’t think that correct.

The difficulty of mining bitcoin has been climbing rapidly for the past 30-45 days. And I don’t see the price going up for bitcoin.

The difficulty of mining has nothing to do with the price of BITCOINS at all because if that is the case then it should be going up or down because the difficulty rate is increasing all the time, just like the stock markets, The value of Bitcoins is dependent on the policies of several countries towards Bitcoins.

[Roukawa]

Yes of course, the more profit that minner bitcoin get the more people want to be bitcoin minner the more people who interested to bitcoin then the price of bitcoin will be increase, its about sentiment, if people think that there are many good potential in bitcoin then people will buy bitcoin thwn cause to the increasing price of it.

I also think that way but as we can see number of miners did not affect the price of bitcoin. Usually, if there are lot of miners then probably it is difficult for a block to mine. The mining is difficult and it is unprofitable if there are lot of competitors in mining.