How do miners affect the price of Bitcoin?

[odolvlobo]

What do you mean by "selling pressure"? Don't you mean supply?  Also, bitcoins are not consumed. Bitcoins sold by miners yesterday are still available to sell today, so the supply is always increasing regardless of who owns it.

What I specifically meant by lower selling pressure: Miners' rewards per block are halved, hence fewer mined bitcoins could be dumped into the markets by the miners. Because some(or most?) miners needs to sell their coins to pay for electricity and stuff.

Not sure which parts of my statements looked like I was saying that bitcoins are being consumed. I think we're misunderstanding each other here lol.

I'll try to make my point clear.

Miner selling pressure today is still selling pressure tomorrow (but not by miners) because bitcoins sold by miners today are available to sell by someone else tomorrow. So, in other words, the total selling pressure is always increasing. The halving may reduce the selling pressure by miners but it does nothing to reduce the continuously increasing total selling pressure.

I hope that was clear and to the point.

Now, in the end, if you want to say the the halving causes the price to rise, you must also include a caveat that you assume that demand is always increasing faster than the supply. The problem with that assumption is that it isn't. In fact, since the supply is predetermined, it is really the demand that affects the price, and not so much the supply.

I apologize for the pain felt by the economics purists caused by my conflation of supply with aggregate supply and money supply, and demand with aggregate demand.

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[mk4]

Miner selling pressure today is still selling pressure tomorrow (but not by miners) because bitcoins sold by miners today are available to sell by someone else tomorrow. So, in other words, the total selling pressure is always increasing. The halving may reduce the selling pressure by miners but it does nothing to reduce the continuously increasing total selling pressure.

Well, true. I was specifically talking about decreased selling pressure from miners in the first place so I agree. My point was just that there's going to be decreased selling pressure from miners; to what extent? We don't know.

Now, in the end, if you want to say the the halving causes the price to rise, you must also include a caveat that you assume that demand is always increasing faster than the supply. The problem with that assumption is that it isn't. In fact, since the supply is predetermined, it is really the demand that affects the price, and not so much the supply.

And I agree. I'm pretty sure I made that clear in my statement that price increase due to the halving was never guaranteed:

While prices are NEVER guaranteed to increase(because it's still completely depends on supply and demand regardless of supply distribution), this is the reason why a lot of people are assuming that the mining difficulty approximately a month and a half from now is going to pump bitcoin's price

[Debonaire217]

I have observed that upon believing about miners setting the higher price of Bitcoin over time, especially when bitcoin halving is about to happen, people especially those who are new to the market are the one's who are selling and taking advantage of this hype to make sure that bitcoin's price will pump very soon. Meaning, over time, bitcoin does really increase of its price and whether we believe it or not, miners does actually have an influence to the market price of bitcoin even if they aren't directly selling their BTC.

[Yogee]

Thank you everyone for taking the time to discuss and share your knowledge. I assume that most of you are miners or have experienced mining before.

My thoughts after reading your comments
- It seems I have over estimated the capacity of miners in affecting and dictating the market price of Bitcoin. While writing my post, I did assume that there's a group of miners that are similar to what we know as "whales" which can set a base price. That may be true before but that's not the case today apparently.
- The influx of new investors over the years decreased the influence of miners and made this more of a free market.

That's it for now. 


P.S.

What's with all that "dirt" in the comments and names? It looks cool but it's a bit annoying when reading.

[mk4]

What's with all that "dirt" in the comments and names? It looks cool but it's a bit annoying when reading.

It's an April fools gag. For a "discussion" concerning it: https://bitcointalk.org/index.php?topic=5236946

[coinfinger]

When they say that Bitcoin cannot be controlled, I don't think they are referring to the price of bitcoin, it's Bitcoin itself; what I'm trying to say is that no one can shut down Bitcoin or give any orders on how things should be done, but as for the price, there are lots of factors that will always affect the price of Bitcoin. But, we all believe that demand and supply is the main thing when it comes to what plays the main role on the price of Bitcoin.

Just like you have mentioned the news as one of the things that controls the price of Bitcoin - bad news can affect the price of Bitcoin creating panic which will then make investors to sell their coins and cause a decrease in the demand of Bitcoin. So when you break down everything, it's all still demand and supply.

[okala]

As an economic the only way miners affects bitcoin pricing is still through the force of demand and supply. The miner mine bitcoin and almost majority of them dump it in exchange with the views of funding their mining farm. I strongly accept the fact that after halving bitcoin will be better in pricing because few coins will be mine par day.

[buwaytress]

My thoughts after reading your comments
- It seems I have over estimated the capacity of miners in affecting and dictating the market price of Bitcoin. While writing my post, I did assume that there's a group of miners that are similar to what we know as "whales" which can set a base price. That may be true before but that's not the case today apparently.
- The influx of new investors over the years decreased the influence of miners and made this more of a free market.

I've found myself over-estimating some miners and supposedly long-time holders too, since 2017 I've heard quite a number of them give up when I thought they surely of all people know how the cycles come and go. But then again, I haven't met anyone close to being a whale. Greater minnows and dolphins or whatever lies in between whales and minnows, but I suspect the true whales are either anonymous or known only to whales themselves, who don't necessarily even partake in these forum discussions.