Ninjastic
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Re: Why is the BTC price dropping again?
by
kokojie
on 13/04/2014, 17:37:08 UTC
Quote from: RoadStress on April 13, 2014, 05:32:55 PM
Quote from: kokojie on April 13, 2014, 05:29:47 PM
Quote from: DurbanPoison on April 13, 2014, 04:55:38 PM
It recovered when it became evident that China won't be banning Bitcoin outright and now it's below $400 again. Any theories as to why?

Because the price was too high, the adoption rate wasn't there yet. China was just an excuse for the traders to dump. Basically any bad news were used as excuse to dump, and good news didn't cause any rise (I consider striple/square implementing Bitcoin very good news, yet they didn't cause any rise).

Think about it, if we maintained the $1200 price tag, each day about 4000 BTC is produced by miners, we need $5 million USD new money, every single day, to maintain the price. It wasn't sustainable at the current adoption rate. So we are dropping down to the more realistic $1.5M each day.

You are assuming that all coins that are produced by miners are sold which is wrong.

Majority of them are sold, electricity bill doesn't pay themselves, and miner cost have to be recouped, I know many miners took on loans to buy miners. Even for miners that doesn't sell, they are just "pre-sold", because their miner investment could've been invested in Bitcoin directly.