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Author Topic: Supply of Bitcoin - Miners, Investors, Merchants - Who Sells the Most?  (Read 852 times)
Jpja
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May 28, 2014, 07:13:22 PM
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Every day X bitcoins are converted into Y units of fiat. The bitcoin price is Y/X.

I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.

Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?

Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.

Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?
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beatljuice
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May 28, 2014, 08:06:27 PM
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Someone announced Bitpay processes a million US dollars a day in BTC and I assume most of that is converted to fiat. And I assume that Coinbase is probably not far behind that.
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May 28, 2014, 08:13:31 PM
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Miners are not the big sellers, beside of what you said that they are bullish, most of them currently would make LOSES if they sell now, i think they only sell a little part to cover the basic expenses, when they usually sell is at the peak of rallys when they can make a decent roi from their investments.
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May 28, 2014, 08:46:55 PM
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Someone announced Bitpay processes a million US dollars a day in BTC and I assume most of that is converted to fiat. And I assume that Coinbase is probably not far behind that.

Yea, here's the link http://www.coindesk.com/bitpay-now-processing-1-million-bitcoin-payments-every-day/

Still there's one metric that puzzles me; miners revenue divided by the number of transactions is more than $30. Obviously as long as miners keep on hoarding (i.e. don't sell) they will not have an impact on the price.  https://blockchain.info/charts/cost-per-transaction
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May 30, 2014, 11:42:57 PM
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That is part of the reason we are still so drastically under valued. Over time less and less merchants will be converting to fiat and we will see scarcity drive the price way up.

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June 06, 2014, 10:08:02 AM
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Miners Sells the Most , cause Bitcoin miners need to pay high energy bill.

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June 09, 2014, 04:26:44 AM
 #7

Every day X bitcoins are converted into Y units of fiat. The bitcoin price is Y/X.

I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.

Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?

Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.

Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?

I would think that the supply from merchants is the greatest. There are many merchants that simply want to get a larger market share accept BTC. Even Overstock only keeps 10% of the BTC that they receive from sales.

Investors obviously believe in BTC, and would carry some of the supply, however most investors only entered the market relatively recently and may not wish to cash out until they receive greater returns.

Miners obviously believe in BTC at least somewhat if they had invested in their machines. I have met a number of miners that have wanted to keep their bitcoin in bitcoin simply because they believe in it.

One source that you forgot is people who wanted to buy something in bitcoin but still have some left over.

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June 10, 2014, 02:18:12 AM
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See my signature, a strategy that cashes out less than 10% per year will be very sustainable and will not change the deflative trend of bitcoin daily supply

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June 10, 2014, 02:40:30 AM
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Every day X bitcoins are converted into Y units of fiat. The bitcoin price is Y/X.

I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.

Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?

Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.

Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?

I would think that the supply from merchants is the greatest. There are many merchants that simply want to get a larger market share accept BTC. Even Overstock only keeps 10% of the BTC that they receive from sales.

Investors obviously believe in BTC, and would carry some of the supply, however most investors only entered the market relatively recently and may not wish to cash out until they receive greater returns.

Miners obviously believe in BTC at least somewhat if they had invested in their machines. I have met a number of miners that have wanted to keep their bitcoin in bitcoin simply because they believe in it.

One source that you forgot is people who wanted to buy something in bitcoin but still have some left over.

Agreed. Merchants followed investors and then miners. The investors because they trade currency for it coin constantly and miners to pay their electricity bill. 

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June 13, 2014, 03:30:56 AM
 #10

Every day X bitcoins are converted into Y units of fiat. The bitcoin price is Y/X.

I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.

Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?

Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.

Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?

I would think that the supply from merchants is the greatest. There are many merchants that simply want to get a larger market share accept BTC. Even Overstock only keeps 10% of the BTC that they receive from sales.

Investors obviously believe in BTC, and would carry some of the supply, however most investors only entered the market relatively recently and may not wish to cash out until they receive greater returns.

Miners obviously believe in BTC at least somewhat if they had invested in their machines. I have met a number of miners that have wanted to keep their bitcoin in bitcoin simply because they believe in it.

One source that you forgot is people who wanted to buy something in bitcoin but still have some left over.

Agreed. Merchants followed investors and then miners. The investors because they trade currency for it coin constantly and miners to pay their electricity bill. 

I think today's miners are probably selling more BTC then then the miners from a year ago, or even six months ago. Todays miners are more like investors who invest in the machines then then sell what they mine in order to repay their investment and try to get ROI. I think a lot of people who own mining machines will sell their miners for bitcoin and then convert that bitcoin for fiat....this transaction would kind of make them all three
Harley997
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June 14, 2014, 12:26:20 AM
 #11

Every day X bitcoins are converted into Y units of fiat. The bitcoin price is Y/X.

I can imagine a lot of the sales comes from miners. ~3600 coins are mined every day. Although most miners are bullish and hoard as much as possible, I believe they sell a lot , partially to cover electric costs and partially to invest in more equipment. Say they dump 1000 coins a day. At $570 per bitcoin, that's more than half a million dollars which need to be invested in bitcoin every day to keep the price from falling.

Investors and others who hold position in Bitcoin obviously sell some coins too. But I have no idea to how to estimate how much, not even how to roughly determine their sales. Any idea where/what statistics to look at?

Merchants accepting Bitcoins and converting them to fiat is yet another source of supply. Also for this kind of selling I wonder how to make an estimate.

Can you think of any other source of supply?
Would it be reasonable to assume that mining supply is far larger than the other sources?

I would think that the supply from merchants is the greatest. There are many merchants that simply want to get a larger market share accept BTC. Even Overstock only keeps 10% of the BTC that they receive from sales.

Investors obviously believe in BTC, and would carry some of the supply, however most investors only entered the market relatively recently and may not wish to cash out until they receive greater returns.

Miners obviously believe in BTC at least somewhat if they had invested in their machines. I have met a number of miners that have wanted to keep their bitcoin in bitcoin simply because they believe in it.

One source that you forgot is people who wanted to buy something in bitcoin but still have some left over.

Agreed. Merchants followed investors and then miners. The investors because they trade currency for it coin constantly and miners to pay their electricity bill. 

I would be interested to see how this changes as bitcoin is adopted by more of the general public.

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