[2018-05-11] Bitcoin to reach $64,000 in 2019, based on mining economy

[WolfFox]

Based on analysis of the bitcoin mining economy, the world’s most well-known cryptocurrency could reach as high as $64,000 USD by the end of next year.

According to independent research boutique Fundstrat, which provides market strategy and sector research, the bitcoin mining boom could potentially send the dominant cryptocurrency by market capitalization to upwards of $64,000 USD by the end of 2019. States the company’s head of research, Sam Doctor, in a report:

We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range.

Fundstrat believes the economics behind bitcoin mining create key support levels — since bitcoin miners are less likely to sell their rewards during market downturns, and more likely to cash out during bull runs. Explained Doctor in a conference call to CNBC on Thursday: "The primary net sellers, in our view, are bitcoin miners, and the rest are transactions between investors".

http://bitcoinist.com/fundstrat-bitcoin-price-64000-2019-mining-economy/

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[odolvlobo]

The article repeats some very common misconceptions:

We believe the current path of hash power growth supports a BTC price ...

The difficulty and hash rate are affected by the price, but opposite is not true. If the price rises above the cost of mining, then miners will add hash rate and the difficulty will rise. Likewise, if the price falls below the cost of mining for the least profitable miners, then those miners will stop mining and the difficulty will drop. There is nothing about the hash rate and difficulty that directly affect the price.

The primary net sellers, in our view, are bitcoin miners, and the rest are transactions between investors.

Of the 1,000,000 or so bitcoins traded each day, at most only 1800 of those come from miners. It is not likely that miners as a group have a measurable influence on the price.

[BitHodler]

Of the 1,000,000 or so bitcoins traded each day, at most only 1800 of those come from miners. It is not likely that miners as a group have a measurable influence on the price.

That, and the far majority of the minted coins won't even end up being sold on the regular market at all.

In case of the largest farms generating the most value out of their efforts, they very likely sell coins outside the regular market when needed or when they accumulated enough coins to fill high value orders.

If there is one thing miners want to prevent, then it's their supply affecting the exchange rate. The smaller miners liquidating their holdings are too insignificant to even dent the market.

Once the block halving has done its work miners will form even less of a problem, especially when you calculate forward how this market will attract more capital. It will only further solidify the market.