today is funny because we've known for 2 weeks that gbtc was going to be actively traded, and you would think that that information would be built into the price. Yet here we are today.

proof that no one knows wtf they are doing trading bitcoin.

also, who sells at 4am EST and expects anything good to happen to the price? thats just another indicator for price/market manipulation.

maybe onemoretimes is right. you can crash bitcoin, just not through mining, but constantly pumping and dumping it before the COIN etf.

Curious where y'alls head is at. What do you guys think the odds are that Bitcoin reaches:

- $1000 before it reaches $100?
- $10,000 before it reaches $20?

Good - very good.

- ~35%
- ~15%

2%
.05%

I think if you see the old lows of 160ish broken.. it will move to 100 rather quickly. 160 isn't that far away!

+1

Just for perspective, if the bitcoin price were a lognormal random walk:

39.8%
40.6%

I.e. Those would be the answers of someone who is exactly neutral on bitcoin, and assumed constant volatility wrt price and time.

1. No idea
2. 100%

Market cap = (coin market price) * (coins outstanding)

Let's imagine you, me, and our 12 other friends each have 1M bitcoins (14M outstanding), and that we trade them for fiat amongst ourselves when we need at $10/bitcoin.

$10 * 14M = $140M

I have a friend Dave Demand come and offer me $15 per coin for all my coins. I accept this offer and Dave now has my 1M coins and 1/14 of the total bitcoin supply. The current market cap is now:

$15 * 14M = $210M

This single free market trade has now increased the market cap by $70M, although Dave only bought $15M worth of bitcoins. He only touched 1/14 of the coin supply, but his new price affected all the coins.

It is incorrect to think that the differences in market cap represent absolute dollars going in and out of bitcoin. The same was true when the price in one month went from $1200 to $600 and the market cap dropped from $14b to $7b. That did not represent 7 billion dollars leaving the bitcoin economy in one month.


Now, the math on mining does represent absolute dollars leaving the bitcoin economy. Every day 3600 coins are produced and handed out. Coins are an asset and can be sold immediately for fiat.

In a mining model you have to consider every single coin being instantly sold, because miners have to pay their electricity and hardware bills in fiat. Miners make money by being able to convert electricity to bitcoins to fiat at a profitable rate. It is important to note that miners do not make money by being bitcoin enthusiasts. In the mining profit model, bitcoin price stability is the priority because it makes their estimations more accurate. They make projections about X many coins that can mine for Y watts of electricity at Z value per coin. If the equation shows they can make a profit, they begin mining.

Notice how this is price agnostic, it doesn't matter if coins are $10 or $1000. If price was $1000 the only change would be that more miners are profitable that previously were not. And bitcoin price stability is crucial for miners because if they cannot make accurate estimations about how much that Z value per bitcoin will be, then their model is rubbish. If hypothetically there was extreme variance, with price shifts of 50% happening weekly, not many miners would mine as they would never know if they'll receive 50% of what they thought, or 150%.

Any miner who does not sell the mined coins represents someone going long on bitcoin (fiat buying and holding bitcoin). How many bitcoins are held by miners is up to speculation, but it is important to realize that they would represent new bitcoins demanded.

From this, we can say with certainty that there is 3600*(market price) of sell pressure from the miners every day. If there is not an offsetting 3600*(market price) of fiat buying and holding bitcoin every day, then there will be negative pressure on the price.

tl;dr if coins shoot up to $1000 tonight and market cap quadruples to ~$14B, miners are still going to receive and sell 3600 coins tomorrow. Only now their daily sell pressure is $3.6 million instead of $900k.

Riddle me this: what would cause the price to shoot up to $1k tonight?

A real reason for people to actually have it outside of speculative purposes

Someone hacks the exchanges and creates rogue accounts like Karpeles did and inputs multi million dollar after multi million dollar buy orders.

Oh, so basically the same way we got there the first time.

Are you guys worried about LEOcoin? The idea of rival currencies that have government support seems bad for btc

I thought I spent the time to make a pretty decent post fleshing out your conflation of the two ideas. Is that what you got from my post?

It is a hypothetical just to show the point quickly. Feel free to replace tonight with 6 months or 1 year. And $1k with $500, $2k or whatever you'd like.

Your post makes no sense. Of course when the market cap rises or falls by $x only some percent of $x of what you call "absolute dollars" has flowed into or out of Bitcoin. The remaining market cap change (market cap difference - $x) is wealth that has either been created or destroyed by bitcoin's perceived future usefulness. This is how all wealth is created. Just because Facebook is worth $100b or whatever does not mean $100b of "absolute dollars" as you call them was invested in Facebook. That would be stupid. Before anyone says ya but Bitcoin is not a company - it does not have earnings and dividends. Something does not have to have earnings for it to have value.

Yes it's true mining puts sell pressure on bitcoin's market cap. My point was that the only way the price goes up is if new money is invested or Bitcoin becomes more useful , or willy bot 3 I guess. All this talk of "absolute dollars" is pointless.

Ok, here's your post from Tuesday where you compare the two equally.

and then still not getting it

Up to you if you want to call the $900,000 of "absolute dollars" of guaranteed daily sell pressure pointless.

ill triple your odds, giving you 6% and .15%, basically free money for you. name how much you want to bet in escrow.

Wtf are "absolute dollars"? It's a meaningless term.

You think that when price goes down its real money leaving system and when price goes up its just a temporary shortage of sellers. I can make the exact same worthless hypothetical counter argument that when the price goes down its just a temporary shortage of buyers and when the price goes up its real money entering the system.

For bitcoin to go up it HAS to have $900,000/day flow into it. As he said before, anybody mining and holding is essentially going long and that would be considered money into it. If they use 100k USD to pay their electrical bills instead of selling their coins, they essentially bought 100k worth of BTC.

So you need over $900,000/day of this going on to make the price go up.



It's just a really really tough LONG battle and it will be that way until reward drops a ton, or until the price drops a ton.


It's like maintaining my beach. The sand washes away and the weeds grow, it's an endless battle with mother nature and mother nature doesn't sleep!

Use whichever term you want. I needed to differentiate market cap dollars from dollars of buying and selling pressure. Could I have used a better term? Maybe. But the underlying concept is the same.

I'm not playing one side here.

We can objectively quantify the selling pressure from miners very accurately.

Looking at a change in market cap does not give us any reasonably accurate figure about buying/selling pressure. Anything inferred from looking at change in market cap is speculation.

I'm trying to differentiate the two for you because you guys keep using this term "money flowing in and out" which is causing a lot of confusion.

You keep insisting that they should be compared equally. If you want to directly compare the two, then be my guest, but your models will be completely inaccurate.

Anyone want to talk about reward drops?

I see halvings as a pretty big issue. It puts bitcoin into quite a bind in order to chase an idealistic goal of one day becoming deflationary. Each halving will basically cut the amount of money that the network pays the miners in half overnight (ignoring tips). This means if price is constant that the amount of network security will drop by half at each halving (also ignoring advances in hardware tech).

It creates a difficult situation where in order to not let network security fall, either a) bitcoin price must rise or b) $ fom tips must rise. If you don't have either of these conditions, then network security will fall as the miners who will now not be able to profitably mine will stop mining.

An easy way to illustrate this issue with numbers is to imagine it's 2029 and the block reward is ~1.56BTC instead of the 25BTC today. If bitcoin is still $250/coin, then network security will only be compensated 225BTC/day = $56,250/day instead of the 3600BTC/$900,000/day that miners are being paid today. Obviously we aren't going to have the same amount of equipment mining if the reward is $50k every day instead of $900k.

If you'd like miners to make the same compensation as today, then 225BTC * $x = $900,000. Price must be $4,000/coin or $ paid via tips has to increase a lot. Either tip size or transaction volume have to increase for that. If tip size has to be raised, then that kills one of the best use cases for bitcoin.

So the halving forces bitcoin to be in a spot where in order to not let the hashrate fall, either price must rise or tips must rise.

If the price doesn't rise, then tips must rise, which will create a reluctance to spend bitcoin, meaning tips will need to rise even more. That is unsustainable. Therefore the price will need to rise or bitcoin will fail.