3600 bitcoins dumped everyday = bearish brainwash propoganda

[ThatDGuy]

I don't think the rise to 266 and crash to 60 was a cycle in its own right, but just a temporary correction during the entire cycle we've been through

I see this as the first cycle:

$0.60 -> $32

there was a mini run up to ~15 and a correction to ~8 early in the cycle

$5 -> $1200  

the run up to 266 and correction to 60 is similar to the smaller move in the previous cycle

both of these cycles had a discernible 'bear market' following the blow off, both had an aborted launch followed by major exponential growth culminating in a price collapse.

I can imagine that this kind of price action is almost inevitable result of human behaviour/emotion, and that its not unreasonable to think that we'll see the same kind of cycle unfold again - the now infamous 560k prediction post touches on this idea of repeated boom/bust cycles during the course of adoption.

I think its a mistake to try and predict the actual prices for the purposes of trying to trade them, but its a fun exercise to think about the size of the moves one could expect should we see another similar market cycle, so with that in mind lets go ahead and extrapolate:

$0.6 -> 32 : 53x
$5 -> 1200 : 240x

If we take the current price of around $200 as being a stable platform for luanch (yes I am choosing these words on purpose )

We take our worst case scenario is being x53 multiplier, a middle ground of 146x and a best case a repeat of the 240x move we see these potential new ATH's:

53x => $10,600
146x =>$29,200
240x => $48,000

Looks like my 5k bet is pretty conservative by those figures!

Now I'm not one to shy away from considering outlandish numbers, so lets imagine for a moment that as the length of the cycle increases then so the magnitude of the move also increases. if we do the most basic linear extrapolation, the first move was x53 the second was x240 so the third must be x1087

Now that gives us $217k. A figure I'm sure that the trollers will all be delighted with as they undoubtedly all actually hold BTC. I ain't even mad. How could I be. At that price I might finally be able to afford that porsche I've been after.

Fire away trolltards, should be plenty of easy pickings in this post

Really interesting analysis here, I hadn't considered the runup to $266 as part of a bigger cycle before.  I do like the sound of those future implications!

[dropt]

Mining and speculation are different businesses.

I bought mining HW on the speculation that I could mine more BTC than I could buy for the same money.  I held the majority of my mined BTC on the speculation that they will go up in value over time.

Having been mining since the beginning of 2012, my speculations have paid off extremely handsomely.

[Miz4r]

Mining and speculation are different businesses.

I bought mining HW on the speculation that I could mine more BTC than I could buy for the same money.  I held the majority of my mined BTC on the speculation that they will go up in value over time.

Having been mining since the beginning of 2012, my speculations have paid off extremely handsomely.

Same here. When you mine you also speculate, it comes with the package. I'm also still holding the majority of the coins I have mined. As fear and despair sets in miners are affected as well so they will add to the selling pressure, but this dries up again as soon as the reversal becomes evident and miners will massively hold their coins waiting for higher prices. What percentage of mined coins are sold during bull markets and bear markets is a question we can only speculate about, I think it's less than 5% during bull markets and maybe around 30-40% during bear markets. Maybe these numbers are wrong but whatever nobody really knows.

[altcoin hitler]

-industrial mining needs pay bills. In a bearmarket they will look to get rid of the coins ASAP ... ask them

- every coin mined will be sold sooner or later

-a coin mined today may not dump on the market today but next year. While today coins mined months ago may dump. So in average it should be 3600 coins a day so your thread is actually pointless bullpropaganda

[pattu1]

-industrial mining needs pay bills. In a bearmarket they will look to get rid of the coins ASAP ... ask them

- every coin mined will be sold sooner or later

-a coin mined today may not dump on the market today but next year. While today coins mined months ago may dump. So in average it should be 3600 coins a day so your thread is actually pointless bullpropaganda

Cloud mining sites just distribute the excess bitcoins. So apart from what is required to cover costs, nothing is sold immediately. Of course, individuals might decided to dispose off bitcoins that they receive.

[Q7]

Let's assume there are three types of miners existing in the market.

1. Perma-bear miner that doesn't believe in bitcoin at all. They will sell whatever they mined for fiat.

OK. Those guys are dumping. But how much % of them are out there? If they are perm-bear, why not short directly on exchange but enter the business of mining instead?

I will say at most 5% of the miners are perma-bears.

2. Savvy miners that do calculation before any mining/selling activities.

The calculation is easy: if expected return of holding > the interest rate of borrowing, it would be beneficial for miners to borrow fiat, rather than sell bitcoins, to pay for the maintenance.

So if miners can sell at $250 within a year from now, they can generate a 25% more intrinsic return comparing with selling today at around $200. And what is their borrowing cost at the moment? 1% or 2%? Everyone can see through that 25% return is way greater than 1% interest rate, right?

What if one miner believes that he/she will never see a $250 price within one year from now? Good question, but the answer is simple. If his expectation is that low, he will choose to quit now and will not remain in the business.

So weaker hands are also shaken out in the savvy miners camp. The more stronger hands, the less dumping from this savvy miner group.

I guess there are 50%-60% savvy miners out there. And they will hold given the low interest rate and the high expected return.

3. Perma-bull miners that totally endorse the potential of bitcoin. They will not sell until bitcoin is widely accepted and price is largely appreciated. They are the remaining 35%-45% out there.

From this guesstimate, you can see NOT ALL 3600 coins are dumped everyday! Miners will do calculation before dumping. Miners can borrow fiat and can wait for a better price to sell. And by reserve selection, bears will not choose to enter the mining business in the first place.

Don't get manipulated by bears' brainwash without your own analysis.

What you say here basically boils down everything to risk factor. If bitcoin can generate 25% intrinsic return which is nonetheless confirmed, then miners would definitely hold on to their coins. However, nobody can guarantee that and hence in order to eliminate risk, they would sell. And talk about selling I don't think they dump all their coins all at one shot. Surely the right strategy would be to sell a portion and another portion to continue to hold on to it