"High fees = low BTC price" Anti-Cen's claim

[cellard]

Anti-Cen is a great poster and has a nice technical insight on things but some things I don't agree with, for example "High fees = low BTC price", it's not clear to me that this is the case at all. High fees means high demand = high price. How much high fees kick out potential buyers? im not sure about that, but people with money is willing to pay. It's a complex thing to calculate, but in any case, let's look at the current scenario:


https://jochen-hoenicke.de/queue/#1,1y

The mempool is as empty as it gets, transactions are fast and cheap, they have been for a while. Particularly in February there's only blue in there which means things are fast and cheap, yep we continue crashing... how does this translate with your "High fees = low BTC price" claim?

What's also interesting is that fees peaked on December 22, which is when we fell to $11183... but im not sure if this is correlated or not.. to me it just means people were FOMOing to Coinbase to buy more, then the crash just happened, and as it started crashing the transaction demand also went down because people (most noobs) went back to thinking Bitcoin is dead and there's no point in buying anymore, but the trigger to stop buying was not the peak in fees.

I would like to discuss the impact on fees on the price and if it's really correlated or not now that we have the data required.

[Anti-Cen]

The mempool is as empty as it gets, transactions are fast and cheap, they have been for a while. Particularly in February there's only blue in there which means things are fast and cheap, yep we continue crashing... how does this translate with your "High fees = low BTC price" claim?

Simple because faith in both the development team and the miners has been destroyed and if you look at the peek fees being
early Jan 2018 and plot that against BTC price crashing then my theory must have legs.

Had the miners just increased fees to make hay whilst the sun shines to say $2.00 per transaction then the price would had dropped
a bit but recovered but holding a knife to peoples throats kind of leaves a lasting impression and pretending that everyone is loaded
that gambles with BTC does not tie up with the facts because even the so called "Day traders" I see here are often working for a few $$$
a day.

What's also interesting is that fees peaked on December 22, which is when we fell to $11183

I seem to recall the peek was later than that but it takes time to slow down and turn around a ship but obviously the 25% a day gains
could not be sustained for long.

I was quite loyal with Bitcoin for a long time but that loyalty meant nothing when profit was involved for the miners and they grabbed it
but FYI money really means nothing too me and I use to be king rat.  

[cellard]

But what about Roger and Ver's spam? Also Coinbase's batching and other big exchanges sorting out the batching problem, and then a % of segwit transaction volume going up which also helps... all of that happened around these times too.

Im sure Ver and Roger were monitoring the price to sync up the spam to it to make it look as if the mempool being full coincided with the crash.

I don't typically believe in conspiracy theories but this is a war and that is how they do it.

You may dislike Bitcoin but it's still the best. Every promise i've seen of a "better Bitcoin" has been a ridiculous scam thus far.

[jseverson]

There certainly seems to be a correlation, but one thing we know about statistics is that correlation does not imply causation.

We could say that high fees make prices drop by turning off prospective buyers and even believers, but we could just as easily say that mass dumping, which drives the price down, also causes mining fees to swell -- effectively making high fees a byproduct of a price slide. It becomes a chicken or egg scenario.

Recent price movements kind of buck the trend though. Fees have been consistently low since January while prices surge every few weeks. Sharp drops don't seem to increase fees either. I would personally chalk up the correlation to mere coincidence, but that's just me.

[cellard]

There certainly seems to be a correlation, but one thing we know about statistics is that correlation does not imply causation.

We could say that high fees make prices drop by turning off prospective buyers and even believers, but we could just as easily say that mass dumping, which drives the price down, also causes mining fees to swell -- effectively making high fees a byproduct of a price slide. It becomes a chicken or egg scenario.

Recent price movements kind of buck the trend though. Fees have been consistently low since January while prices surge every few weeks. Sharp drops don't seem to increase fees either. I would personally chalk up the correlation to mere coincidence, but that's just me.

Yeah exactly, it's what comes first, chicken or egg situation, this is why I think Anti-Cen's claim is assuming too many things.

In my version, it doesn't necessarily mean low BTC prices, since most people isn't even transacting in Bitcoin, as we have seen after transaction batching by big exchanges, the transaction volume went down:

https://blockchain.info/charts/estimated-transaction-volume-usd?timespan=all

For me, this is transaction batching mostly, sure there is the FOMO period in there too, but I think BTC is not being used to transact as much as people thought, BTC is being used to HODL it mostly, and this is why I think "High fees = low BTC price" claim is not too accurate, since for hodlers, we don't really care, since we barely transact.

I want to see how things will look like in the next FOMO period, now that we got batching, segwit and other stuff making the fees go down.