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RE: BITCOIN (BTC/USD): Daily Update [Fuck Haejin's subscription!]
Does hash power come down to meet price or does price go up to meet hash power .....
Does hash power come down to meet price or does price go up to meet hash power .....
Hash power will likely go down if price goes down. Mining starts to be unprofitable and the small farms that barely breakeven will choose to stop.
Other mining farms that can bear the risk of Bitcoin not going up in a while, could continue mining to gain as much BTC as possible for the long run (even thought they would be loosing in the short term)
Anyways is a good point. Trends in hash power could show some insight about what the whales thing about the market in the foreseeable future.
May I add to this conversation? If the installed mining equipment capacity is place, they already have made the capital expenditure. I think they keep mining a bit below their operating costs/bitcoin. If it stays below that for some time, I wonder if all the companies planning and installing mining capacity slow down their capital spending?
Etherium is working on an alternative blockchain operating method to move away from Proof of Stake (PoS). I wonder how this will affect the mining companies? I understand the target is about 2 years from now.
I have a sizable investment in mining company HIVE. They will have 44.2MW of installed capacity in place by September. I asked them in an email about the threat of blockchains moving away from mining. They said they are aware. I think they will be moving into other crypto investments to diversify as well.
Miners can also more easily hedge with futures, letting them operate while losing some money.
That's a good point. Many of them will also hold onto their mined coins an can sell them as needed to cover operating expenses.