23 Dec 2014
Bitcoin economy showing signs of maturing – Sunshine Profits
FXStreet (Barcelona) - Mike McAra of Sunshine Profits, notes that one area of bitcoin economy is maturing much faster than the others, making profits harder as consolidation picks up.
Key Quotes
“One area of the bitcoin economy is maturing much faster than the others, to the point where profits are increasingly harder to come by and consolidation and diversification are already happening: the mining of bitcoins. For years, bitcoins were mined largely by a far-flung network of desktop hobbyists. But increasingly, a smaller group of companies building large data centers set up for the sole task of mining new bitcoins.”
“Perhaps the biggest squeeze on smaller miners has been the drop in the price of bitcoins. After surging from $99 to $1,147 late last year, bitcoin has fallen back to $344 this week, a decline of 70% from the peak. One big reason for the decline is thought to be the race itself to mine bitcoins: As miners sold their bitcoin rewards to finance new equipment, those coins added to the overall supply in the market.”
“On BitStamp, we saw yet another day of appreciation yesterday. The move up was also on volume higher than on the day before. Does this mean that the short-term picture is now bullish? Not necessarily.”
“Yesterday, we wrote: Usually a mixture of upswings on stronger and declines on weaker volume might be a bullish indication. This could be supported by the fact that the volume today is already higher than yesterday and today has been a day of appreciation.”
“On the other hand, the recent moves haven’t really represented a comeback to a possible declining trend line. This could, in turn, suggest that the short-term picture is still bearish. The situation is slightly cloudy.”
Key Quotes
“One area of the bitcoin economy is maturing much faster than the others, to the point where profits are increasingly harder to come by and consolidation and diversification are already happening: the mining of bitcoins. For years, bitcoins were mined largely by a far-flung network of desktop hobbyists. But increasingly, a smaller group of companies building large data centers set up for the sole task of mining new bitcoins.”
“Perhaps the biggest squeeze on smaller miners has been the drop in the price of bitcoins. After surging from $99 to $1,147 late last year, bitcoin has fallen back to $344 this week, a decline of 70% from the peak. One big reason for the decline is thought to be the race itself to mine bitcoins: As miners sold their bitcoin rewards to finance new equipment, those coins added to the overall supply in the market.”
“On BitStamp, we saw yet another day of appreciation yesterday. The move up was also on volume higher than on the day before. Does this mean that the short-term picture is now bullish? Not necessarily.”
“Yesterday, we wrote: Usually a mixture of upswings on stronger and declines on weaker volume might be a bullish indication. This could be supported by the fact that the volume today is already higher than yesterday and today has been a day of appreciation.”
“On the other hand, the recent moves haven’t really represented a comeback to a possible declining trend line. This could, in turn, suggest that the short-term picture is still bearish. The situation is slightly cloudy.”