Why is important to understand this numbers and this numbers are shaping on long term the BTC price charts.
Note: Looking at the price of #BTC, I believe there are some things every BTC owner should know.
Plus, every little bit helps to morally support BTC owners so they don’t get bullied by BigMOney corporations in to selling BTC cheap out of fear.
Most of pple reading this here would know that but I thought it might be helpful for new memebersso bare with me if you feel this is elementary.
When analyzing the possible price movements of an asset we need to consider 2 factors: production costs and demand.
So demand is dependent by market “feelings”, Investment Funds jumping, Mainstream Media positive or negative coverage, etc. Most of the time this gives the momentum, sharp movements in short period of times.
On a long term we need to consider the production costs. And here the Hashrate is essential.
BTC and Hashrate
I love #BTC because it has transparency, clear numbers. Hashrate is one of those numbers showing the ammount of computational power invested to encrypt/mine the next block.
Why is this important?
Computational power = hightech hardware + energy = money as in cash $$$$.
With more money invested for hunting new BTC blocks, obviousy the cost of every BTC in the market is increasing.
You can factor in the inflation too. Semiconductor shortage and energy prices booming this year are also contributing to the cost of every BTC block.
So, mining a BTC block requieres now more computational power than ever. Look at the chart (courtesy of blockchain.com)
But hey, the cost of that computation power (Hashrate) has increased too.
Semiconductors cost fo production are at the highest level this year:
Semiconductors cost of manufacturing
Enrrgy prices are also at the high end, even if Aug-Oct 2021 have seen the tip in energy prices at least for now.
electric energy price North America last 3Y
With supply chain disruptions & high inflation expected in 2022 too, we can not expect to see this costs go down. Even more with renewable energy political push, the cost of electricity will get more and more expensive. Gas – that used to be the cheapest energy resource is at an historically high price.
In conclusion we can expect computational power/ hash power to get more expensive in 2022 too.
Getting back to BTC – This is why your BTC, even counting on the same demand, is worth more than ever.
Gold line : Every BTC block that was mined in December was more expensive than ever because it took more computational power than ever and that computational power was more expensive to produce.
Looking forward in 2022, Mastercard (with $BKKT), Visa, Finserv, Hedge funds and many more market makers that manage collectively hundreds of billions, wil need BTC. When they will need it they’ll have to buy. Nobody (from the miners) will sell under the cost price that is highest then ever right now! Why they won’t sell? Because it will cost even more in 2022 to mine a BTC block!
Now, do you see why you should hold your $BTC?