RE: The price of bitcoin has been sliding, but the hash rate continues climb!
Don't see any logic here.
#1 If more highly efficient miners come online, this causes an oversupply condition, and prices should fall, not rise. Rising prices are what happens when miners drop out due to unprofitable biz models, thus bitcoin rises due to reduction in supply. So you have this backwards we believe.
#2 If you are correct and mining moves to lower cost regions, then Venezuela per your chart would be come the #1 best place to mine bitcoin, and thus the BTC price would likely drop to it's cost of product. If your data is correct (we don't really believe that Venezuelan number, we'd want to see reasons why it's so low), then BTC would drift down to below $1,000 per BTC.
While we think that's where BTC is actually going before 2018 ends, not sure you're arguing that.
Is there really a reduction in supply though, bitcoin is produced roughly every 10 minutes correct? The difficulty just gets adjusted to match the number of miners.
But same number of coins when distributed over less number of miners - increases profit for miners. Therefore, I argue that hashtate growth has to come down for btc prices to go up
Have you looked at the hash rate vs. price trends to see if this is actually what tends to take place in the market?
I have done some analysis in past but I am getting some additional insight into how to look at hash rate growth and it’s relations to price. I am in vacation now. I will publish soon my analysis after my holiday is over.
Interesting thought, first of all the supply of bitcoin is very low, the effect of the supply increase doesn't really explain the price drop in a short term of 6 months (since january). The logic is here, when the price drops mining should be less incentivized and the hash rate should drop, but according to @jrcornel graph that didn't happen, so either miners are operating at losses now or they are more efficiently mining.
Yes exactly, the main point was that it is surprising that the hash rate continues to make new highs while prices continue to make lower lows.
The miners had already committed their investment. They have no other avenue to use their resources. So now they are cutting their losses by mining at losses. And so my argument that additional mining power will not be deployed for some time resulting in reduced growth of hash rate.
This is a good point. Some of these large scale miners took months or even years to get setup like they are right now, which means they mine whether prices fall or fly.