Quote from: miernik on July 05, 2013, 10:01:02 PM

Quote from: JoelKatz on July 05, 2013, 06:24:52 AM

Quote from: nexus99 on July 03, 2013, 09:01:46 PM

BTC value has dropped 15ish% in the last week?

The person I know who knows the most about the business side of Bitcoin shared an insight with me. A significant fraction of Bitcoins are held by miners. They are long-term bullish on Bitcoins, so they hold rather than selling, essentially hoarding Bitcoins and keeping the price high. Now, ASICs are about to totally change the mining landscape. They either have to give up on mining or buy ASICs. Since they're long-term bullish on Bitcoins, they believe it makes sense to buy ASICs and invest in mining. But to do that, they need cash. So they're selling their Bitcoins to get cash to buy ASICs. This is pushing the price down. Essentially, the value in the Bitcoin economy is being sucked out by ASIC manufacturers. If this person is right, we could see low prices at least until the vast majority of miners are on 28nm ASICs.

Why would they need to sell Bitcoins to buy ASICs?

Aren't ASIC sold mostly for Bitcoins now?

Didn't Avalon switch to Bitcoin pricing?

Yes, but play it through...

I buy an ASIC miner for bitcoin, and send bitcoin to the manufacturer.
The manufacturer needs to buy components, pay staff for labour, and otherwise spend bitcoin to make the ASICs. Many vendors and people don't accept bitcoin, which means the manufacturer needs to sell bitcoin to get cash.