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Topic
Board Speculation
Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
mestar
on 01/02/2015, 07:42:57 UTC
...  velocity of money ...
What's interesting about money velocity is it's range. Average time bitcoin is held can vary from 10 minutes (confirmation time) to 20 years (retirement money), that is in million times. That is if bitcoin perception in user's mind changes from "hot potato" to "gold", it price will increase million-fold.


Once you decide to hodl, you do not influence the price of bitcoins.  The price is decided by those that trade on the exchanges. 

Currently, those are speculative buyers, speculative sellers,  buying to 'transact', selling to close the 'transact' loop,  and daily $700,000 (or less) that miners have to sell to pay for running costs.

Third and fourth on that list should be equal.  So, once the first and second items on that list become equal, (and there is no reason why speculative buying would have to be higher that speculative selling), the only way the price of bitcoin will go is down.  Miners do have real bills to pay.




Also, not every miner has to sell to "pay the bills" (you assume miners has btc as the only and exclusive revenue.). I do not. I mine, i did not sell a fraction of my BTC so far. Just because i mine BTC does not mean that is the only revenue i have, so i balance my other revenue costs to me to pay electric bill vs future possible profit from mining bitcoin.


By not selling bitcoins to pay the electricity, you are moving yourself into 'speculative buyer' category, in this simple 5 categories model. 

It still holds that some fresh cash is needed, and in this case you provided this fresh cash yourself.