We found a Very Good Reason to defend that Bitcoin will not Crash
Maybe some Altcoins will disappear, but not Bitcoin.
It is important to point out that the relationship between a climbing hash rate and the Cryptocurrency price does not seem to follow a pattern
The cost of computing power to miner Bitcoin may be lowering while the capacity to miner is rising.
Less energy to miner means less cost to miner, and higher profits, because the main expense in the process is the expensive energy.
But, It’s also possible that miners will sell more of their holdings as margins get squeezed.
As prices of Cryptocurrency drops, hash rate keeps stable, and that means whoever is mining Bitcoin theses days are for the long-term.
They are accumulating as they miner. At the same time, sometimes they have to clear the house and dump it as much as needed to stable the mining game and keep the decentralization of Cryptocurrency a reality.
But, where is the bottom for those big investors?
Analysts have defined support for prices. Fundstrat Global Advisors has estimated $8,000. Morgan Stanley has said that large mining farms make money only with Bitcoin trading above $8,600, according to a CNBC report. Researchers at CoinShares, which offers cryptocurrency investment products, estimated in a May report the average marginal cost of a Bitcoin is $6,400. The digital currency traded at about $6,500 on Friday.
The number varies depending on the miner’s efficiency. Genesis Mining, for instance, is still expanding capacity, Streng said. Miners that also manufacture equipment have the benefit of immediate and cheaper access to their hardware and can adjust prices of their products to maximize profits, according to the CoinShares report.
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The fact is that heydey of cryptocurrency mining is over.
Genesis Mining said Thursday it will terminate contracts that are mining too little to cover the daily maintenance fee. Semiconductor companies are also seeing a slowdown in demand from miners.
Another reality is that cryptocurrency mining is no longer for normal people and it is dominated by large competitive companies.
A good News for the Long Term and Miners Holders, is that hardware efficiency is rapidly increasing and costs are coming down.
As the Selective reality happens, Miners are securing access to highly competitive sources of electricity, often ones that would otherwise lie idle, and show high degrees of mobility.
Big players will not lose everything, and their investment is mostly on Bitcoin. Also, to not lose everything, they are willing to invest even bigger money to make it happen, so even if there are many difficulties to be approved by governments, and make it legal, time is the only barrier.
When big players came in last year, they bought machines very expensive and that would only payoff after many years. So, they will not give up so easily and that is main reason why we believe Bitcoin and many Altcoin will survive and cryptocurrency will not crash completely.
At the beginning of the year Moving Water predicted the crypto bubble, and it did happen, dropping from almost 20k to 6k. But that does not mean it is over for Cryptocurrency.
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Thank you for choosing