Original | Liu Jiaolian
BTC continued to fall overnight, once breaking through 63k (63,000 USD). [ Last night, the 6.23 internal reference mentioned several reasons for the recent downturn. For example, since June alone, BTC miners have poured billions of USD of spot into the market at the fastest speed in a year ].
In fact, it is a good thing that miners are in a hurry to sell, especially when miners are forced to sell their mined new coins as quickly as possible.
The reason is simple:
Suppose a miner mines a BTC at a cost of $40,000 and immediately sells it at the market price of $60,000. He has "overdrawn" $20,000 in profits from the BTC system and injected $40,000 worth of "negative entropy" into the BTC system.
If he has no financial pressure and is not in a hurry to sell the BTC at $60,000, but instead hoards it temporarily and waits for a higher price to sell it, then when BTC rises to $100,000, he sells it. He will have "overdrawn" $60,000 in profit from the BTC system and injected $40,000 worth of "negative entropy" into the BTC system.
Obviously, from the standpoint and perspective of the BTC system, it is obvious which transaction is more cost-effective: paying $20,000 to get a value of $40,000, or paying $60,000 to get a value of $40,000.
When the halving occurred in April, the cost of mining one BTC for the miner doubled immediately to $80,000. However, he still lost money when he sold it at the market price of $60,000.
If he did this, he would be withdrawing negative $20,000 in profit from the system and injecting $80,000 in value into the system.
His best strategy at this time should be to hoard temporarily until the BTC price rises above $80,000 before selling.
However, the production of BTC is constantly consuming it, which is the beauty of PoW (proof of work): miners are forced to sell BTC within a limited time and cannot hold it for a long time. (PoS lacks this feature, thus forming a solidified class inequality)
He can choose to "exchange", that is, sell the BTC with a production cost of $40,000 at the market price of $60,000, and temporarily hoard the BTC with a production cost of $80,000.
The market is a higher-level intelligent entity than an independent individual. It will sense that miners still have low-priced inventory, so it will not quickly increase the price, but instead decrease it, forcing miners to consume their inventory.
When the low-priced inventory is almost digested and a sufficient proportion is replaced by high-priced inventory, the market will start to rise.
Although prices lead computing power and computing power is linked to costs, prices must never be higher than costs for a long time, because that would mean that the market is engaging in unfair transactions with miners for a long time.
In the long run, the market will compress the profit margin of miners into a delicate, as small as possible and yet competitive range. In this regard, you can review the data in the article " Automatic Adjustment of Bitcoin Mining Difficulty and Its Effects (2 Real Cases) " published by Jiaolian on August 14, 2023. The CAGR of miners in 2013 was only 2.4%.
So, when miners are destocking, is it a good opportunity to get on board when BTC is reversing to pick up people? According to the above logic, if you get on board at this stage, you are taking advantage of the miners.
From the perspective of the power law, the current price range is on the regression line. This is a tangled position, neither a good time to buy the dips at a low point below the regression line nor a good time to sell at a high point above the regression line.
According to netizens' calculations, from the next sigma below the regression line, the price range at the end of 2025 will be between 54k-228k. If it is expanded to 2 sigma, the range will be expanded to 43k-533k.
In terms of probability, 1 sigma = 68%, 2 sigma = 95%. That is, there is a 68% probability that the price will not exceed $228,000, and a 95% probability that the price will not exceed $533,000.
Of course, different power law models are not completely consistent with each other because of slight differences in fitting parameters, but this slight error is acceptable.
For example, the support price table calculated by another netizen:
As can be seen from the table, it will be $26,000 at the end of 2023, $38,000 at the end of 2024, $54,000 at the end of 2025, and $74,000 at the end of 2026... These positions are support levels that are difficult to break.
So, back to the original question, is the 63k BTC car still available?
The answer to this question depends on the length of funds in hand.
If it can survive three years and will not fall below $74,000 after the end of 2026, then the current cost of adding to the position at $63,000 (63k) will obviously not be a problem.
(Official account: Liu Jiaolian. Knowledge Planet: reply “Planet” to the official account)
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is an extremely high-risk product and there is a risk of it returning to zero at any time. Please participate with caution and be responsible for your own actions.)
