What's happening in December?

[hongus]

Well I've been thinking. In December there's gonna be ASIC mining but the block rewards are halving too. What will happen to the Bitcoin exchange rate? The ASIC is gonna flood the market with coins but the block halving is gonna increase the price of coins. So in December are bitcoins gonna plummet, stay the same or rise?

[gabbynot]

Yes.

[fatigue]

Yes.

I agree with sir troll

[humanitee]

How is ASIC going to flood the market with coins?

Coins are generated at more or less a constant rate due to difficulty adjustments.

[OgNasty]

How is ASIC going to flood the market with coins?

Coins are generated at more or less a constant rate due to difficulty adjustments.

Exactly.  The price will rise regardless of ASIC mining.  You will just be mining far less coin per MH/s.

[proudhon]

How is ASIC going to flood the market with coins?

Coins are generated at more or less a constant rate due to difficulty adjustments.

The number of coins generated will obey the algorithm, that's true.  Right now, though, the number of coins on the market is vastly lower than the number of coins that could be on the market - people are still saving hoarding most of them.  Though, I think we've been seeing a trend of less hoarding as time has gone on and more and more people are taking lower and lower profits.  That that's happening is compelling people who would otherwise hold to sell in order to take some profit, you know, before the other guy does and he can't get as high a price for his volume.  When ASIC mining comes online en masse I think that's going to accelerate competition to take profit, as people compete to sell their coins in order to pay off their investment.  This will drive the price down.  Additionally, I think this will be compounded by the block reward halving.

[humanitee]

I don't think any of that matters. Hoarders are hoarding for higher prices, not $7.

The real question is will Bitcoin garner more support and acceptance as we approach December. I think this will be the case, and will drive the price higher.

[bitcoinBull]

How is ASIC going to flood the market with coins?

Coins are generated at more or less a constant rate due to difficulty adjustments.

The number of coins generated will obey the algorithm, that's true.  Right now, though, the number of coins on the market is vastly lower than the number of coins that could be on the market - people are still saving hoarding most of them.  Though, I think we've been seeing a trend of less hoarding as time has gone on and more and more people are taking lower and lower profits.  That that's happening is compelling people who would otherwise hold to sell in order to take some profit, you know, before the other guy does and he can't get as high a price for his volume.  When ASIC mining comes online en masse I think that's going to accelerate competition to take profit, as people compete to sell their coins in order to pay off their investment.  This will drive the price down.  Additionally, I think this will be compounded by the block reward halving.

The trend is more hoarding. Fewer people are selling, the selling volume peaked in Feb and March in a panic at prices below $5. Purchases of ASIC miners are long-term investments made by value investors, they'll buy more coins if price gets low, not sell them to break even. The block reward halving actually compounds the incentive for investors to buy, not to sell.

The ASIC reality is a sign of market confidence and value investment. That is attracting more speculative buying which will drive the price higher. Its a matter of weeks before $7.2 succumbs to the upward trend.

[Tomatocage]

Bitcoins will be generated at 50% the rate they are now.  How will that affect price?  A quick look at what happened to Ixcoin and i0coin tells us that their price doubled to tripled after the block reward reduction.  Will that same affect happen to Bitcoin?  Probably.  Buy now while it's relatively cheap, I guess.

[Bitcoin Oz]

I already have to pay close to or over 7.2 in Australia for bitcoins.

[adamstgBit]

I already have to pay close to or over 7.2 in Australia for bitcoins.

wow 7.2! where do you get Australian bitcoins? SpendBitcoins.com?

[mystery2048]

My prediction is in early december, there will be alot of volatility and price swings... nobody will really do anything in response to the block chain halfing until other people do, therefore everyone will do it at the last minute... There should be some major change in the price, but I am not sure how much... It would be a good time to get your money into an exchange so you can put in buy/sell orders and try and make a gain... Also, nobody knows the exact date of the block halfing, so this could affect things too..

[proudhon]

My prediction is in early december, there will be alot of volatility and price swings... nobody will really do anything in response to the block chain halfing until other people do, therefore everyone will do it at the last minute... There should be some major change in the price, but I am not sure how much... It would be a good time to get your money into an exchange so you can put in buy/sell orders and try and make a gain... Also, nobody knows the exact date of the block halfing, so this could affect things too..

True, nobody knows the exact date, but anyone can get a pretty good idea of when it'll be within a few days, and the closer we get the more accurate the estimates will become.  However the market responds to the halving will be, I think, priced in well in advance, if it hasn't already been priced in.  I doubt whether it happens 1 or 2 days later/earlier will matter much.

[Realpra]

Bitcoins will be generated at 50% the rate they are now.  How will that affect price?  A quick look at what happened to Ixcoin and i0coin tells us that their price doubled to tripled after the block reward reduction.

That is very interesting. It was also my theory.

My reasoning is that miners more often will sell to fund their operation while speculators and real users buy.

If the buyers are stable and supply is suddenly cut in half price has double for the buyers to be able to dump their fiat into BTC.

That then creates a rally to more than double and then back "down" to double again after the rally ends.

(Supply is the flow, not the total amount, same with demand.)

I shall recommend people to buy then.

[Bitcoin Oz]

I already have to pay close to or over 7.2 in Australia for bitcoins.

wow 7.2! where do you get Australian bitcoins? SpendBitcoins.com?

One place

Bitpiggy is another.

Cryptoxchange sometimes depending on their volume.

[pereiraex]

Bitcoins will be generated at 50% the rate they are now.  How will that affect price?  A quick look at what happened to Ixcoin and i0coin tells us that their price doubled to tripled after the block reward reduction.

That is very interesting. It was also my theory.

My reasoning is that miners more often will sell to fund their operation while speculators and real users buy.

If the buyers are stable and supply is suddenly cut in half price has double for the buyers to be able to dump their fiat into BTC.

That then creates a rally to more than double and then back "down" to double again after the rally ends.

(Supply is the flow, not the total amount, same with demand.)

I shall recommend people to buy then.

You have to consider that miners may follow basic economic theory too (that people will hold on to their money if they expect it to appreciate)

Hoarding by miners, plus heavy buying by speculators will push the bit coin price further up, providing nothing catastrophic impacts upon the bit coin economy.

[squall1066]

Is it me or am I the only miner keeping my coins because I actually want to use them as a crypto-currency?
I am spending my currency to acquire bitcoins to revolutionize and liberate everyone's lives.

Somehow I feel the point to all this is lost on some people.

[drakahn]

right now i mine and consider it buying coins with electricity... if asics/block rewards make it cheaper to buy with cash... so be it... i can't be the only one which to me means price is still going up

[Technomage]

I don't think that the reward drop is even close to being priced in yet. It's partially priced in but it will truly be only when it starts to become a major talking point. It's a minor talking point now, which does affect the situation slightly, but I think that from August to December the talk will really begin and at some point we will get major news coverage that mentions the event, it is a major event after all.

Only then can we talk about the event being priced in. There is a chance that it becomes overly priced in and we form some sort of a bubble. That is something to think about.

As far as ASIC mining is concerned I simply don't believe that it affects the relative amount of sold coins in any significant way. It's mostly the same miners buying ASIC that have mined with other hardware before. They will get more profits but there is very little reason to assume that they would be hoarding any less especially because it is generally assumed that the price will have a lot of pressure to go up especially with the block reward drop coming.

It will affect the amount of sold coins for a while and that is because the absolute amount of coins being created increases for a certain period of time. During the ASIC boom this amount will be significantly higher than usual. We will have 2 week periods where the regular 7200 bitcoins (or 3600 after December) per day simply does not apply, difficulty might double in one of those periods meaning that there are actually much more coins than usual being created.

Of course it's important to note that there are a hell of a lot of other things that affect Bitcoin's price and a lot of other things going on in the Bitcoin world. Looking at only the reward drop and ASIC mining might be a very erroneus way of looking at it, it's important to take everything into account. We simply don't know what is going on later this year in regards to everything else (Bitcoin news, developments, usage).

In all probability I think all of those indicators will be way up but we will see.

[Realpra]

You have to consider that miners may follow basic economic theory too (that people will hold on to their money if they expect it to appreciate)

Hoarding by miners, plus heavy buying by speculators will push the bit coin price further up, providing nothing catastrophic impacts upon the bit coin economy.

But miners have running costs and are spending their time on it. Unless they are hobbyists or have loads of savings to burn on this particular kind of BTC "buying" they would have to sell at some point.

Assuming that the big miners are semi-professionals and thus depend on BTC income is not that unreasonable.

The other major sellers would be BTC millionaires slowly living off their BTC treasure, I am guessing this flow is of minor volume.


Another part of my theory/prediction is the "least resistance"-idea: BTC would tend to flow to those who believe in the idea and are saving it.

Thus larger and larger amounts of BTC get "locked up" in savings accounts.

However new BTC, mined coins, statistically should be more likely to be in the hands of sell-minded people and will thus set the price.


Speculators may sell, but their money is likely still at mtgox and they will usually buy back in at some point so at the end of the day they are simply "buyers".

Only once normal BTC holders/believers also become spenders in a greater BTC economy will all these dynamics change.