Hi,
We often hear that Bitcoin can't get below a certain price because mining cost is above that.
Short/Mid term price is determined by financial speculation. Long term price is determined by fundamentals and adoption. People that sell on exchanges drive the price down and people that buy on exchanges drive the price up.
Mining cost is geographically variable and irrelevant for the price action. The price dictates the behaviour of miners and not the other way around.
We can say that there are two kinds of miners. Miners that sell Bitcoin for immediate profit and miners that accumulate.
These last ones don’t care about the price today. They mine to accumulate and hold because they are very bullish long term. In fact, these kind of miners, want the price to go down short term. They get less competition and more reward. Why ? Because the group of miners that sell immediately are going to shut down their machines at break even. Some of them cloud mining company’s that pose great competition.
Miners mine BTC and hold it or sell it. If they sell the price goes even further down. If they hold it they help support the price but it’s still not going up. Only people that buy on exchanges drive the price up.
The biggest danger for Bitcoin’s price is it’s centralization. Very few people have most of Bitcoin. If one of them, for some reason, decides to sell on exchanges, the price can go dramatically down. Mining cost, at a given point, somewhere in the world, cant stop that.
Best Regards,
Alexandre Simões
We have that conversation a while ago, nice post
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Thank you so much for sharing this amazing post with us!
Have you heard about Partiko? It’s a really convenient mobile app for Steem! With Partiko, you can easily see what’s going on in the Steem community, make posts and comments (no beneficiary cut forever!), and always stayed connected with your followers via push notification!
Partiko also rewards you with Partiko Points (3000 Partiko Point bonus when you first use it!), and Partiko Points can be converted into Steem tokens. You can earn Partiko Points easily by making posts and comments using Partiko.
We also noticed that your Steem Power is low. We will be very happy to delegate 15 Steem Power to you once you have made a post using Partiko! With more Steem Power, you can make more posts and comments, and earn more rewards!
If that all sounds interesting, you can:
Thank you so much for reading this message!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Congratulations @alexandresimoes! You received a personal award!
Click here to view your Board
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit
Congratulations @alexandresimoes! You received a personal award!
You can view your badges on your Steem Board and compare to others on the Steem Ranking
Vote for @Steemitboard as a witness to get one more award and increased upvotes!
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit