The recent surge in bitcoin and Ethereum has attracted new investment.In addition, DeFi’s fever has climbed, making it seem as if the bull market of 2017 is about to repeat itself.But is the bull market really coming?In this article, we will analyze whether the solid price foundation of Bitcoin has been formed.
from the supply and demand relationship of Bitcoin and the cost base of Bitcoin (namely mining industry).
Market supply and demand relationship
If you talk about the current macro economy, such as the Trade war between China and the United States, the world economy is in turmoil, and the price of gold is soaring, it can be concluded that bitcoin, as the “digital gold” of cyberspace, will also have a huge rise.Because digital gold bitcoin will also be an important haven.You can also point out the institutional digital currency investment layout, most notably the Grayscale.But here would like to give a most basic financial common sense, is also Buffett’s famous saying: “The time to be greedy is when others are afraid, and the time to be afraid is when others are greedy.”Amid the market’s general optimism, we can’t ignore the dangers.
So, what we can really analyze is the second one: the cost base
In addition to its financial properties, Bitcoin is more like a manufacturing industry, just as gold is a financial property, but behind it is a mining industry.So bitcoin has a very strong manufacturing attribute — one that gets weakened every time it’s halved.But it still matters.
The current number of new bitcoins per day: 6.25 *6*24h=900
The mining cost is analyzed by using the most popular 30–50j /T energy efficiency ratio mining machine in the market, corresponding to BitMain’s S17 (50J/T) and S19 Pro (30J/T), as well as WhatsMiner’s M20 and M30.
The mining cost of the S19 is about 40% and that of the S19 Pro is about 34%.
Add in the flood season and miners to eliminate the old mining machine, now the global mining average energy efficiency ratio should be a little more than 50J/T, then what’s the corresponding proportion of mining cost?
Less than 50%.That’s less than $6,000.There should be a lot of miners participating in this expectation, and the flood season has not passed, so the profit should be good.But the flood season has been more than two months, and the computing power still did not rise, with the highest isjust 130EH. Isn’t this is a bit abnormal?The reason for the delay in the rise of computing power is not only the internal management of some head miners (infighting), but also the more important reason may be the supply chain problems.
Supply-chain problems have caused overall growth of computing power didn’t meet the expectations, and many miners have cut back on investment.There may be many problems in the supply-chain, such as the trade war between China and the United States, the hardware supply of TSMC, the internal management of BitMain and so on.
At present, the computing power is basically between 120 and 130EH. The opinion in the media is that miners are waiting for the market, while the reality is that the market is waiting for miners.
Without high enough computing power, prices are unstable, and manufacturing industry is the solid foundation of this financial market.So bitcoin doesn’t have a solid price base yet, and the bull market is probably not there yet.
About ZB Group
ZB Group was founded in 2012 with the goal of providing leadership to the blockchain development space and today manages a network that includes digital assets exchanges, wallets, capital ventures, research institutes, and media. The Group’s flagship platform is ZB.com, the industry leading digital asset exchange. The platform launched in early 2013 and boasts one of the world’s largest trading communities.
ZB Group also includes ZBG the innovative crypto trading platform, and BW.com, the world’s first mining-pool based exchange. Other holdings include wallet leader BitBank, as well as exchange brands ZBM, ZBX and Korea’s Bithi.
Industry intelligence and standards are headed by the recently launched ZB Nexus who embody the core values of ZB Group and open-source their reports and analysis for the public.
Learn more about ZB Exchange by visiting www.zb.com.