What do you think the effects of soaring prices and fiat depreciation is on BTC?

[pooya87]

On one hand we have the decreasing oil supply that is shooting the oil price up to the moon, that in turn has been increasing the fuel prices up to record highs, that in turn will increase cost of transport that affects cost of everything else from groceries to rent.
We also have the conflicts in major oil rich regions (Russia and Arab countries) that is threatening to escalate and cut off more oil from global supply increasing it to over $200.

On the other hand we have the inflation thanks to money printing spree that governments had over the past couple of years and don't seem to want to slow down. Which means price of everything is rising even more while fiat value keeps dumping.

In my experience when fiat is dumping people will look for a way to keep their purchase power or at least part of it. That is achieved by investment. I believe bitcoin has become a viable investment for many because of its deflationary nature and the fact that it has been performing excellently all these years.

How much do you think bitcoin price is going to rise this year because of all this economical drama?

[1715382235]

1715382235

[1715382235]

1715382235

[1715382235]

1715382235

[Husires]

I tend to read these factors in reverse, which is that the price of bitcoin mining will rise according to the previous factors, which means that the average bitcoin mining will rise and therefore if any correction occurs, it will not last for a long time below that level.


I will use the data here that represents the mining value a year ago
BTC price is ~ $56,000    -   Price now is ~ $40,000.
Hashrate is ~ 167 EH/s   -   Hashrate is  ~ 191 EH/s

we consider both 5.5¢ and 3.5¢ per kWh costs which mean electricity is 20% more expensive than in January 2021 and price will keep increase by XX% every couple of months.

Production Cost of 1 BTC per ASIC model

using                                         base 24h cost @ 5.5¢/kWh               base 24h cost @ 3.5¢/kWh
Antminer S19 Pro, 110T                $5,778                                          $3,677
Antminer S17 Pro, 53T                  $7,726                                          $4,917
.
.
.
Averages                                      $11,459                                        $7,292

The lifetime cost of an ASIC miner to mine one bitcoin is on average $15,000-$19,000 USD

Source: https://minerdaily.com/2021/how-much-does-it-cost-to-mine-a-bitcoin-update-may-2021/
By calculating inflation, high prices, oil price, and other variables, we can say the lifetime cost of an ASIC miner to mine one bitcoin is on average $25,000-$30,000 USD

Thus, we can predict that if the demand increases, it is difficult to see levels below 30k, and then the price will rebound quickly.

Based on it, the average stability may be at 40k to 60k, and the peaks are higher than 70k.

[Beerwizzard]

On the other hand we have the inflation thanks to money printing spree that governments had over the past couple of years and don't seem to want to slow down. Which means price of everything is rising even more while fiat value keeps dumping.

Just FYI. During recent years world economy had a few serious shocks and it might be that they are the problem and not your "printing spree".

In my experience when fiat is dumping people will look for a way to keep their purchase power or at least part of it. That is achieved by investment. I believe bitcoin has become a viable investment for many because of its deflationary nature and the fact that it has been performing excellently all these years.

No one is dumping fiat, it is doing fine. There are even many ways of saving your savings without buying volatile shitcoins. It seems incredibly stupid to buy crypto if your goal is just to save your money from inflation.

[pooya87]

~

Interesting thoughts but they are irrelevant as I've argued many times bitcoin is not a product and the price is not set by its "producers" aka miners. In other words it doesn't really matter if it costs X$ to mine one bitcoin, price can very well drop to X/2 or rise up to 100X regardless of how much it costs to mine it.

No one is dumping fiat, it is doing fine. There are even many ways of saving your savings without buying volatile shitcoins. It seems incredibly stupid to buy crypto if your goal is just to save your money from inflation.

Are you calling bitcoin a shitcoin?!

[Beerwizzard]

Are you calling bitcoin a shitcoin?!

So people need to buy only BTC? Another part of crypto world does not worse your attention?

Anyway, even BTC can easily lose over 10% per day which is too high if you are going just to save your money. Other coins beside BTC are even more volatile. You probably need to live somewhere in Venezuela in order to have BTC as a security asset.

P.S.
It is also not clear how current situation in the world affects BTC. Just imho, the impact is negative.

[jackg]

I think volatility of every market is going to increase a lot and that'll be passed on to btc whenever the stock market (or commodities like gold) crash - if they do.

Bitcoin will probably not maintain its value with the dollar unless salaries and other incomes people receive do (if people have to earn more due to inflation - and many will be making gmoney off natural resources around about now - quite a bit of those funds might end up going into btc and other investments).

[Reid]

By a lot.
It won't be soon because there are still options for what they did with Russia or what Russia did. I felt the oil price so bad I think I am just fixing my bicycle and be healthy again. 
There's not a lot of people now who are unaware with economics and how to save their money from being less valuable, thanks to the internet. All they had to do now is google how they can retain the value of it.
Now the options. It cannot be just simply saving it with banks, that is 1:1. It must be something else and Bitcoin will be shining on those moments of questions.

[tokeweed]

I think we're back again like 2018 when we're trying to cope and convince ourselves that the up trend that started around 2020 isn't over.  I mean I have no crystal ball and I have no idea what's gonna happen but the price action is def not good right now.  And if anything I think BTC will be testing 28k - 30k support again in a couple of months or so.

[lizarder]

On one hand we have the decreasing oil supply that is shooting the oil price up to the moon, that in turn has been increasing the fuel prices up to record highs, that in turn will increase cost of transport that affects cost of everything else from groceries to rent.
We also have the conflicts in major oil rich regions (Russia and Arab countries) that is threatening to escalate and cut off more oil from global supply increasing it to over $200.

On the other hand we have the inflation thanks to money printing spree that governments had over the past couple of years and don't seem to want to slow down. Which means price of everything is rising even more while fiat value keeps dumping.

In my experience when fiat is dumping people will look for a way to keep their purchase power or at least part of it. That is achieved by investment. I believe bitcoin has become a viable investment for many because of its deflationary nature and the fact that it has been performing excellently all these years.

How much do you think bitcoin price is going to rise this year because of all this economical drama?

To see whether or not this case has an impact on bitcoin, let's look at other war cases involving oil prices rising so sharply, for example the case of the Iraq war, Palestine or other countries, but in general crypto is not affected too much by these cases, even though when it comes to problems oil, the country is the largest contributor, I am sure the effects of the war involving Russia and Ukraine did have an impact, but not so much for bitcoin's journey in the future, if you ask bitcoin at what price will it reach under these circumstances, it could possibly stagnate at current prices or it could increase significantly

[OgNasty]

I still think of Bitcoin as a speculative asset.  I think it's been lucky to have avoided a recession and that has kept the narrative alive about it being a store of value.  I think if we do see a horrible 2008 style recession in the US (and globally) that Bitcoin will turn out to not be the safe haven that everyone has expected it to be.  Granted, it's price volatility has us more accustomed to massive drops, but I don't think a recession would lead Bitcoin's price higher.  It seems more likely to me that if Bitcoin were to even remain stable, it would be massively dumped in order to scoop up traditional assets at massive discounts.  I think it would be hard to envision a scenario where everything else crashes but Bitcoin continues to rise in value.  That's just not how things work.  It would be pretty awesome though for us holders. Fun to think about I guess.

[stompix]

We also have the conflicts in major oil rich regions (Russia and Arab countries) that is threatening to escalate and cut off more oil from global supply increasing it to over $200.

Poeple are thinking that consumption would still be growing if the price of oil goes constantly up, which is not the case. If you have rising prices in everything poeple would start buying less, driving less, consuming overall less stuff of everything, driving down demand for oil and thus prices.

I've told people a few times, Europe still has a last resort option when it comes to gas prices, cutting all extra tax, which in most cases is more than half of the overall price,  going from 400 to 800 euros per ton. And while Europe might still be able to pay for even such high fuel prices, other countries won't be able to, especially poor and heavenly reliant on oil ones like India.
You won't see the average 3rd world country citizen paying 3$ for one liter of gas.

How much do you think bitcoin price is going to rise this year because of all this economical drama?

If even half of what you're saying about the economic crisis, rising prices in basic goods, business shutting down, and so on and on, where is the money for investments going to come from? In a period as such isn't far more likely you will see poeple having to dig in their investments and selling them in order to pay for food and rent?

I will use the data here that represents the mining value a year ago
BTC price is ~ $56,000    -   Price now is ~ $40,000.
Hashrate is ~ 167 EH/s   -   Hashrate is  ~ 191 EH/s

Two years ago, the price at ~8000, hashrate at ~120EH/s.
Applying that cost model on these numbers would show some really weird stuff 

[adaseb]

Why do you think the stock market had one of the craziest bull markets ever after March 2020 crash? Basically people stopped shorting the stock market and realized “the fed will print a crazy amount of money, where will we hedge our savings?” And the answer was in investments like crypto, stocks, real estate, etc.

Yes it did have an affect. However now it’s effect is different because tapering is done and fed needs to increase rates to battle inflation. Hence why the stock market and crypto have been on a huge sell off recently.

[thecodebear]

Well, in the long-term, high inflation is good for Bitcoin as it will drive more people to Bitcoin. But it won't have much of a short-term effect, beause education about Bitcoin is so horrendous most people just think of it either as a scam or a really risky speculative asset. We're not yet at the point of adoption and education in which we'd see a near-term effect on Bitcoin's price from high inflation (the only people who are buying Bitcoin due to inflation are bitcoiners). Long-term for sure though high inflation will gradually send people looking for alternatives to cash and people will gradually learn more about Bitcoin and realize they need it to store their value.

The US monetary system is in a very bad place as there is zero appetite from either political party for the government to not have huge deficits, and therefore it needs very low interest rates, but inflation is out of control in part because of the endless spending which won't go away, and it needs high interest rates to tamp down inflation. I basically expect inflation to stay relatively high long term now to the point where it's very bad but not the terrible current ~8% once interest rates rise, but interest rates won't rise too much because that endangers everything, hence the continued high inflation. Long term this will drive many millions of Americans into Bitcoin as bitcoin education spreads in the coming years.

In the near term though, all the various global market worries and geopolitical events as well as bitcoin specific worries like regulation are affecting the price a lot more than inflation. But as we've seen Bitcoin is showing remarkable strength in light of everything and as we can all see it is bottoming during this time of heightened fear at a pretty reasonable price (as opposed to the people projecting $20k or $10k or whatever). Things are looking very good for Bitcoin right now, the world just needs a few months to move past this period of heightened fear and uncertainty and geopolitical upheaval.

[pooya87]

I think we're back again like 2018 when we're trying to cope and convince ourselves that the up trend that started around 2020 isn't over.  I mean I have no crystal ball and I have no idea what's gonna happen but the price action is def not good right now.  And if anything I think BTC will be testing 28k - 30k support again in a couple of months or so.

The up trend started on April 2019, we had a crash and recovery in 2020.
It seems like you are back in 2018 insisting on duplicating a crash that has no reason to be duplicated since the previous rise was not even close to 2017.

for example the case of the Iraq war, Palestine or other countries,

Can you provide solid proof? The examples you brought are not correct. For example Iraq was sanctioned and was effectively out of the oil market already when US invaded. Palestine isn't considered a player in oil markets. Other countries didn't have any major conflict affecting their oil, maybe in Syria but nothing more. The biggest I can think of was Saudi Aramco in 2019 which didn't affect oil price that much (about $4 increase in October).

I think if we do see a horrible 2008 style recession in the US (and globally)

I don't think we can see that ever again because the world has changed significantly ever since 2008. Even then the effects weren't completely global, there were countries that were largely unaffected. In today's world the economy is not as entangled with US economy anymore, it is also becoming less entangled with it, basically the more US sanctions other countries the more it isolates itself.

I've told people a few times, Europe still has a last resort option when it comes to gas prices, cutting all extra tax, which in most cases is more than half of the overall price

If Russia ends up sanctioning Europe and forces them to buy their gas elsewhere like from US the cost is going to go so high that no amount of "last resort" could solve the ridiculously high prices.

If even half of what you're saying about the economic crisis, rising prices in basic goods, business shutting down, and so on and on, where is the money for investments going to come from? In a period as such isn't far more likely you will see poeple having to dig in their investments and selling them in order to pay for food and rent?

I'm not talking about crisis, I'm talking about higher inflation rates.
As someone who has lived through a couple of these let me tell you that people do invest to keep their purchasing power. In fact many of them go on an investment spree even if they go hungry.
I can show you pictures of long queues of people standing in line in 2018-2019 to buy gold coins because the government had just printed a ton of fiat and it was losing value.
Similarly the bitcoin market was also super heated despite 2018 being the bear market and most of 2019 being accumulation with no rise (against USD). I sold 0.1 bitcoin back then since I needed the money for about 35% higher than market price due to the huge demand during those times.

[lizarder]

for example the case of the Iraq war, Palestine or other countries,

Can you provide solid proof? The examples you brought are not correct. For example Iraq was sanctioned and was effectively out of the oil market already when US invaded. Palestine isn't considered a player in oil markets. Other countries didn't have any major conflict affecting their oil, maybe in Syria but nothing more. The biggest I can think of was Saudi Aramco in 2019 which didn't affect oil price that much (about $4 increase in October).

the evidence can be seen from various existing media sources, as I said before, the effect of war tensions between the two countries is indeed there, but the effect is not that big, in the past two days bitcoin has gone up a little better, although it finally returned down, if this is broadly linked to the case, should bitcoin have been at its lowest price since the start of the war, I understand that?

[pooya87]

~
the evidence can be seen from various existing media sources, as I said before, the effect of war tensions between the two countries is indeed there, but the effect is not that big, in the past two days bitcoin has gone up a little better, although it finally returned down, if this is broadly linked to the case, should bitcoin have been at its lowest price since the start of the war, I understand that?

Yeah, the effects haven't been that big so far but the price fluctuations and fear in the energy market was also never this high. As I said this price rise affects everything, oil, etc. are not just some some random assets in some market, they affect everything.

P.S. It seems like two Saudi oil facilities were hit again yesterday during all these price rises although there is a heavy media silence looming over it or it is being heavily censored. Oil market doesn't seem to have felt the fear yet.

[Charles-Tim]

My idea is that there can be money devaluation which is normal right from when fiat was created in a way to help the economy, even all the world are experiencing fiat devaluation as a result of Covid-19, even the war between Ukraine and Russia may contribute more to this which can take years.

But what is still getting me confused is that we do not know what will be bitcoin all-time-low from 2020 to 2024 would be, if the price of bitcoin is decreasing, it will be more profitable for people that buy at the lower price (but waiting can be a way someone can miss the next bull run).

In long term speculation, if someone can hold bitcoin for long, like for 2, 3 or more years, buying during this time will not be a bad idea at all, but there can still be more downturn. With $69000 all-time-high, bitcoin has reduced in price to $39000, if someone buy bitcoin now and hold it for long and if he is not panic during downturn, but smiles and waiting for bull run, certainly bitcoin will reach all-time-high and this will be an hedge against inflation.

[gantez]

In long term speculation, if someone can hold bitcoin for long, like for 2, 3 or more years, buying during this time will not be a bad idea at all, but there can still be more downturn. With $69000 all-time-high, bitcoin has reduced in price to $39000, if someone buy bitcoin now and hold it for long and if he is not panic during downturn, but smiles and waiting for bull run, certainly bitcoin will reach all-time-high and this will be an hedge against inflation.

Really a hedge against inflation? For the individual hodling for that long and suffering all the inflation effect ? Or a hedge generally for bitcoin itself ? To this it will be difficult that we can analyse bitcoin price with inflation for that long. Inflation maybe be higher or lower at that such a time but fiat is even different from bitcoin. Buying a btc now in expectation to hedge inflation in the future isn't the purpose of bitcoin.

[stompix]

~

If Russia ends up sanctioning Europe and forces them to buy their gas elsewhere like from US the cost is going to go so high that no amount of "last resort" could solve the ridiculously high prices.

This is your problem, always your hate for the western world pushes to analyze situations in a way to arrive at the conclusion you want not at the obvious one.
The Arab nations tried to play this game and force the US in a corner, ended up with the US becoming the biggest oil producer, the URSS tried this policy also but ended up in collapse, simply put it never works! Thta's reality!

There are two and only two scenarios if Russia cuts the oil flow to Europe:
- Russia cuts the oil flow completely, ending up more broke than the USSR, with more enemies and a fraction of the economy the Union had and all Europe has to do is what? Well, pay more than other oil importers, and since the price of gasoline doesn't matter in terms of the PPP indicator behind which most 3rd world countries hide their poverty, who is going to afford gas at 3$, the average European making $1200 or the average Indian making $200? Plus in the case oil goes, there is a lot of oil that is not pumped in a lot of countries because it wasn't economically viable to do so but it will at constant prices over 100$
-second scenario, far simpler, Russia cuts the oil to Europe and sells it to China. All the oil exporters that sell 6m barrels a day to China are pushed obviously out and they will, in turn, sell it to Europe. Simple as that!

Plus, there are already cracks in the war against the western nazis, Maduro seems to be kept to ramp up production and sell to the evil capitalist, he might like he loves those useless green bills.

I'm not talking about crisis, I'm talking about higher inflation rates.
As someone who has lived through a couple of these let me tell you that people do invest to keep their purchasing power. In fact many of them go on an investment spree even if they go hungry.

Yeah right!
You could look at the price chart and then look the rush of investors selling bread and MRE for BTC.
Bitcoin is down -10% on the 30 days interval and 30% on YOY.

Again, analysing facts in such a way to arrive to your already established conclusion is NOT analysing, is wishful thinking!

[EdenHazard]

My idea is that there can be money devaluation which is normal right from when fiat was created in a way to help the economy, even all the world are experiencing fiat devaluation as a result of Covid-19, even the war between Ukraine and Russia may contribute more to this which can take years.

But what is still getting me confused is that we do not know what will be bitcoin all-time-low from 2020 to 2024 would be, if the price of bitcoin is decreasing, it will be more profitable for people that buy at the lower price (but waiting can be a way someone can miss the next bull run).

In long term speculation, if someone can hold bitcoin for long, like for 2, 3 or more years, buying during this time will not be a bad idea at all, but there can still be more downturn. With $69000 all-time-high, bitcoin has reduced in price to $39000, if someone buy bitcoin now and hold it for long and if he is not panic during downturn, but smiles and waiting for bull run, certainly bitcoin will reach all-time-high and this will be an hedge against inflation.

+1 , the devaluation will always there no matter what , that is the nature of money itself.

Just like the inflation, that's why bitcoin invented.
Isn't it as a money revolution as well as an inflation hedge, no? People will always run into bitcoin from now on when they looking for a safe haven from such uncertainity of depreciation / inflation.