Re: Halving guide for noobs: Why it's not possible for halving to be priced in now
Most people in the speculation forum don't understand anything about Bitcoin mining. The first thing you need to understand is, nobody running a current process node miner actually turns them off no matter what the price does. You're either an ASIC dealer that spent millions on research and design to make it, or some random Joe that paid a big premium for one. Turning them off makes no sense for anyone since Bitcoin is an asymmetric investment. Unless you're mining with crazy expensive electricity, your current generation miner will either pay off eventually, or Bitcoin will go to 0. There's no purpose in turning it off.
Since the amount of miners deployed increased a lot with the recent price increase, this means the floor miners will stop selling at raised too. After the halving, the miner profitability drops in half. If the majority of the network is composed of ASICs that are supposed to be technologically viable, or even near their ROI period at all, but the sell rate is not favorable to that, they will simply stop selling, supply withers to nothing, then the price boom occurs.
Miners also tend to mine at a loss in hopes of future returns (being a deflationary system and all) long before turning their miners off. It is 100% inevitable price increases after halving. Post halving price is a function of what the market can bear pre-halving. We've already seen the Mike Hearn R3 propaganda scare dumps where the market didn't drop that much then rebounded anyway. There's not a problem with the market supporting this ballpark of pre-halving price.
No matter how you look at it, post halving, in one way or another, through multiple dynamics, the supply will decrease propotional to demand. Mining is a form of demand. Mining is a decentralized exchange, Coinbase is a centralized exchange. The price could increase 50%, it could increase 100%, or depending how elastic demand is, it could go much higher through a big shock in supply side distortion.
Since the amount of miners deployed increased a lot with the recent price increase, this means the floor miners will stop selling at raised too. After the halving, the miner profitability drops in half. If the majority of the network is composed of ASICs that are supposed to be technologically viable, or even near their ROI period at all, but the sell rate is not favorable to that, they will simply stop selling, supply withers to nothing, then the price boom occurs.
Miners also tend to mine at a loss in hopes of future returns (being a deflationary system and all) long before turning their miners off. It is 100% inevitable price increases after halving. Post halving price is a function of what the market can bear pre-halving. We've already seen the Mike Hearn R3 propaganda scare dumps where the market didn't drop that much then rebounded anyway. There's not a problem with the market supporting this ballpark of pre-halving price.
No matter how you look at it, post halving, in one way or another, through multiple dynamics, the supply will decrease propotional to demand. Mining is a form of demand. Mining is a decentralized exchange, Coinbase is a centralized exchange. The price could increase 50%, it could increase 100%, or depending how elastic demand is, it could go much higher through a big shock in supply side distortion.
Excellent post r0ach, one of the best & most informative threads I've seen in ages. I actually learnt a few things there. Thank you!
Roach has it spot on, the pre-halving will drive the price up 50% at least and then the aftermath could/might be epic into 4 figures. And, that all depends upon where the worldwide financial system is at that point which could mean 5 digit territory.
Excellent, I love it when a plan comes together
