/biz/ - Business & Finance

[Anonymous No.11903302]

>bought in at 16k
>panic sold at 3500
Who /financiallyruined/ here?

[Anonymous No.11903318]

>bought in at 3.5k
>panic sold at 16k

[Anonymous No.11903497]

Brainlet here, can some anon who believes that the 2020 halfening will cause a bull run please explain to me *why* it will cause a bull run? I originally thought that the decrease in sell pressure would cause a small pump which would cause people to fomo into buying, but I'm no longer sure that makes sense.

Back in July 2016 (the month of the 2nd halfening), the daily BTC trading volume was around $130 million a day. The price of bitcoin was around $670, so the halfening should have reduced miner revenue by around $1.2 million a day. That was less than 1% of the daily trading volume, so I find it hard to believe that the reduction in sell pressure would have caused a big enough pump to cause people to fomo in. Is there some flaw in my reasoning?

As a side note, miners selling newly minted BTC currently makes up just 0.11% of the daily trading volume - a significantly smaller fraction than it was back in 2016.

[Anonymous No.11903524]

>>11903497
If it currently costs around 3k to mine a bitcoin when that halves it now costs 6k...

[Anonymous No.11903583]

>>11903302
expectations vs reality

10mil, kek

[Anonymous No.11903589]

>>11903302
>bought at 16k

[Anonymous No.11903621]

>>11903302
Don't worry kiddo, just 3 more years till you break even :-)

[Anonymous No.11903634]

>>11903621
And how many years people waited when dotcom burst?

[Anonymous No.11903643]

>>11903524
I don't think this explains it. There are several problems with your statement.
1) Lower rewards would cause some people to stop mining, which would cause the cost of successfully mining a block to be reduced.
2) As I pointed out in >>11903497, even if the miners completely stopped selling newly minted BTC, it still wouldn't cause a major pump.
3) Miners are rewarded with more than just newly minted BTC. They also get the transaction fees. As a result, the halvening won't actually cut the total revenue of all miners in half like your post is implying.

[Anonymous No.11903650]

>>11903302
>Bought in spring of 2017.
>Hodl all this time strong hands.
>Panic sold this weekend
>Why didn't i sell last January???

[Anonymous No.11903669]

>>11903302
Idiots like you should never even think about investing in anything.

[Anonymous No.11903674]

>>11903634
Ironically, about 3 years, provided you didn't buy the absolute top.

[Anonymous No.11903693]

>>11903497
80 million barrels of oil are produced per day, routinely over a billion barrels of oil are TRADED per day. Do you believe that if tomorrow half of all the oil producers went dry, the price would only move by 1%? Similarly, 1.5 million tonnes of gold is traded annually, but only 3500 tonnes is produced. That small amount that is produced drives the price that is traded.

Here's why:

The ratio of daily volume to miner volume is irrelevant, if the SINGLE and only source of bitcoin supply halves it will, bar any other events, cause a huge price rise. Consider this hypothetical scenario:

You and I run trading bots, we conduct 10 trades scalping a 1% profit, so I sell 10k USD btc, then buy it buy for 9990 USD, then sell it for 10010 USD, etc 10 times. I generate theoretically 100 USD profit, but I've created 1 million USD in volume. You meanwhile outright dump 10k worth of BTC as it is part of your business, and don't buy it back. My sales are 10% of your sales, but have a far bigger impact on price since I don't buy it back.

[Anonymous No.11903753]

>>11903674
And how much for tulip?

[Anonymous No.11903764]

>>11903634
Amazon and Google were part of the dotcom bubble

[Anonymous No.11903791]

>>11903589
Lots of people did. I was laughing at people buying at 5500 and learned to shut my mouth when I missed out on tripling idle dollars at the time.

[Anonymous No.11903797]

I bought at 10k JUST

[Anonymous No.11903950]

>>11903693
>You and I run trading bots, we conduct 10 trades scalping a 1% profit, so I sell 10k USD btc, then buy it buy for 9990 USD, then sell it for 10010 USD, etc 10 times. I generate theoretically 100 USD profit, but I've created 1 million USD in volume. You meanwhile outright dump 10k worth of BTC as it is part of your business, and don't buy it back. My sales are 10% of your sales, but have a far bigger impact on price since I don't buy it back.
This was a good explanation of why it was dumb of me to look at trading volume. Thanks.
>80 million barrels of oil are produced per day, routinely over a billion barrels of oil are TRADED per day. Do you believe that if tomorrow half of all the oil producers went dry, the price would only move by 1%?
This seems like a bad analogy. If we stopped pulling oil out of the ground then the total supply of usable oil would rapidly decline because people consume it. BTC is occasionally lost, but the supply of BTC wouldn't dwindle nearly as quickly if new BTC stopped being minted as the supply of usable oil would dwindle in your hypothetical example.

I just did a little reading about how the quantity of money impacts prices (https://thismatter.com/money/banking/money-growth-money-velocity-inflation.htm).). It looks like if 2% of the BTC in circulation is lost every year, new BTC suddenly stopped being minted, the USD started experiencing 0% inflation, and people stopped trying to use BTC as a speculative investment vehicle, then the price of BTC would start to climb at about 2% per year.

It now seems to me that the halvening should merely cause BTC to be less inflationary, rather than causing prices to immediately skyrocket. Please correct me if I'm fucking up again.

[Anonymous No.11904028]

>>11903950

Price is determined by sell pressure and buy pressure, miners represent a constant sell pressure, new money flowing in represents buy pressure.

Volume between individuals is basically irrelevant, you can generate billions of dollars of volume with just sideways movement, but if a couple million NEW money moves in, the price jumps. A halvening will cause the sell pressure to half, so it doubles the impact of buy pressure. You can just discount volume of traders.

Big banks spend lots of money on fancy algorithms to determine which volume is which kind of trade but there is a fundamental difference. For example the TOTAL amount, according to the maths done at JP Morgan, of money that went into crypto over the last decade, let that sink in.

Over a ten year period, a mere 6 billion dollars cause the market cap to reach 800 billion dollars. Because high frequency traders have a marginal impact on price, net inflows and outflows do. So now consider that out of that 6 billion, over a decade long period, in a single year at an average price of 10k, miners create a sell pressure of 500 million USD, over the course of that year. Next halvening the sell pressure will be only 250 million USD, couple that with a (theoretical) increase in inflow since we are assuming in 2 years more money will go into bitcoin (not a crazy assumption) and you have a boom.

There is more detailed and more complex explanations for how all this works.