filbfilb

The Economics of the Bitcoin Cycles

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
This is a continuation of the chart shared which helped be nail the absoloute bottom in 2018 please review the original chart and commentary for further explaination.



As a recap, as Satoshi said himself rightly pointed out that commodity costs are likely to gravitate to production cost.. why? Because miners will sell into demand where revenue per unit > cost per unit. Likewise, collectively they are disincentivized to sell when revenue < cost.



So what happened in 2018

- Sell off to Marginal Cost
- Race to the bottom of most efficient miner
- Eliminate Inefficent competion
- Utilize futures to lock in profit

Where did that leave us
- Inefficient miners eliminated
- Disincentive to Sell
- Incentivised to limit output sale
- Push price to 2x production pre halving
- Simple to do due to huge short interest
- Disincentive to sell below new production cost
- New bottom 2x old bottom

Whats likely to happen next
Action most likely from miners:
- Sell production / Hedge down while existing MC is still low
- Limit selling pre halving to envoke new halving bubble back to current prices
- Limit sale of production
- Maximise revenue per unit
- Sell new bubble

This ofcorse is a theory but this theory did exactly what it said on the tin last year. We have also seen the pre halving hype bottom out at 2x the cycle bottom.
Comment: ps follow on twitter as per my bio, same handle for more.
how to know where the new bottom is supposed to be already by now? production cost still could vary a lot until we finally arrive at the bottom.
and how come anyway production cost has doubled in such short amount of time (new bottom 2x old bottom)?
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filbfilb moviestar
@moviestar, because the ouput halves every 4 years.
+1 Reply
moviestar filbfilb
@filbfilb, so this would also mean the new bottom is not expected to be reached till after the halving?
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When altcoins season is going to start? This idea below explains it
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Hi Filb, I just DM you, interested in paying for your indicator as you talked about in the telegram group. Can you reply? Thanks a lot for your time.
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Bitcoin is at its highest. Actually was at 13k. It is last time. We area heading to the new bottoms guys. It is last opportunity to sell btc and especially all the s''''coins. Be awake.
+1 Reply
@RAFAL_D, thanks for this well thought throguh absoloute statement input.
+9 Reply
RAFAL_D filbfilb
@filbfilb, hopefully your answer was not sarcastic. Anyway I know we are going down tremendously. Have a good day.
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