Cryptocurrencies

[Parsad]

29 minutes ago, UK said:

Who would have thought that crypto would need a fiat bailout:)))

 

LOL!  Cheers!

[nsx5200]

This is almost a decade old, but I think it's still relevant:

https://www.quora.com/What-would-happen-if-the-electricity-cost-to-mine-bitcoin-exceeded-the-value-of-the-bitcoin-reward

"Bitcoin’s difficulty retargeting reduces mining difficulty after sustained hashrate decline (protocol adjusts every 2,016 blocks, ~every 2 weeks). Lower difficulty reduces electricity cost per expected reward for remaining miners."

"While hashrate falls before difficulty adjusts, average block time lengthens (fewer blocks per hour). Transactions confirm more slowly, increasing mempool backlog and fee pressure."

"Reduced hashrate lowers cost of attacking the chain (easier to mount 51% attacks). However, if difficulty subsequently falls and profitability returns, security restores."

 

It seems like crypto mining compete with AI in electricity and silicon(compute) resources.  I can see that if this AI binge continue to grow, it may be the trigger that cause the collapse of bitcoin(lost in faith), especially if Bitcoin's halving(scheduled in 2028) occurs during prolong electricity and silicon shortages.  The bitcoin price($70k) is ~15% away from breakeven mining cost ($60k) before we see a steep drop off in miners.  It will be interesting to see how the Bitcoin faithful's behavior will change at that threshold.

[Paarslaars]

Where is the 60k mining cost coming from? Sources I find indicate it is more at 70k:

 

[UK]

1 hour ago, nsx5200 said:

This is almost a decade old, but I think it's still relevant:

https://www.quora.com/What-would-happen-if-the-electricity-cost-to-mine-bitcoin-exceeded-the-value-of-the-bitcoin-reward

"Bitcoin’s difficulty retargeting reduces mining difficulty after sustained hashrate decline (protocol adjusts every 2,016 blocks, ~every 2 weeks). Lower difficulty reduces electricity cost per expected reward for remaining miners."

"While hashrate falls before difficulty adjusts, average block time lengthens (fewer blocks per hour). Transactions confirm more slowly, increasing mempool backlog and fee pressure."

"Reduced hashrate lowers cost of attacking the chain (easier to mount 51% attacks). However, if difficulty subsequently falls and profitability returns, security restores."

 

It seems like crypto mining compete with AI in electricity and silicon(compute) resources.  I can see that if this AI binge continue to grow, it may be the trigger that cause the collapse of bitcoin(lost in faith), especially if Bitcoin's halving(scheduled in 2028) occurs during prolong electricity and silicon shortages.  The bitcoin price($70k) is ~15% away from breakeven mining cost ($60k) before we see a steep drop off in miners.  It will be interesting to see how the Bitcoin faithful's behavior will change at that threshold.

 

 This is interesting, perhaps mistakenly, I thought the thinking always was that more expensive electricity would be good for BTC price?

[Milu]

I don’t fully understand why the media are reporting on the concept of a bitcoin bailout. What are they expecting would be ‘bailed out’ exactly. Bessent was asked this question and also made it clear that it doesn’t make sense. Then see stories in the media ‘bitcoin falls after bessent rules out bailout’. So much nonsense. 

[TwoCitiesCapital]

7 hours ago, Paarslaars said:

Well that looks like normal policy to me... not sure why anyone would expect anything different. That said, you think Trump won't bail out his sons and his own company?

 

I'm as confused as Milu is about "bailing out Bitcoin", but Trump enriching himself and his family does make 10000% more sense. 

 

7 hours ago, Paarslaars said:

Anyway BTC down to 70k, basically trading at mining cost. Historically this has always indicated a bottom, though reversal can take a few months.

We've also +/- reached last cycle's top, which is also a typical bottom indicator. 

That said, all predictions are typically wrong... let's see what happens. 

 

My primary concern is this is happening while the rest of the market is ripping even while employment and Japanese bond yields are sending warnings signals that things are more fragile and on the verge of breaking .

 

I dunno where the bottom is, but I don't expect we hit it before economic weakness gets prices into other assets. Maybe this whole drop was BTC sniffing out the next recession

[TwoCitiesCapital]

5 hours ago, Paarslaars said:

Where is the 60k mining cost coming from? Sources I find indicate it is more at 70k

 

Further up thread there was a Grok response breaking it down. $50-60k is the expected electricity costs. Closer to $70k when you consider equipment, leases, labor, etc. 

 

5 hours ago, Paarslaars said:

 

[SharperDingaan]

4 hours ago, Milu said:

I don’t fully understand why the media are reporting on the concept of a bitcoin bailout. What are they expecting would be ‘bailed out’ exactly. Bessent was asked this question and also made it clear that it doesn’t make sense. Then see stories in the media ‘bitcoin falls after bessent rules out bailout’. So much nonsense. 

 

Stories planted to float the idea of a fed reserve liquidity injection. Last time around it was 5B+ and lifted the BTC price by around 6K. Bessent's rejection killed the hope, so now a bail out rests on Orange Boy ordering one. Probably will occur, but not until BTC demonstrates a stable bottom for a time.

 

SD

Edited February 5 by SharperDingaan

[Milu]

1 minute ago, SharperDingaan said:

 

Stories planted to float the idea of a fed reserve liquidity injection. Last time around it was 5B+ and lifted the BTC price by around 6K.

 

Bessents rejection killed the hope, so now a bail out rests on Orange Boy ordering one. Probably will occurr but not until BTC demonstrates a stable bottom for a time.

 

SD

But what would be the purpose/need of a fed liquidity injection? If gold, which is an asset with about 10-20 times the size of bitcoin, dropped by 40% in a year, is the fed going to 'bail out' gold holders. I'm a bit confused by this.

[TwoCitiesCapital]

13 minutes ago, Milu said:

But what would be the purpose/need of a fed liquidity injection? If gold, which is an asset with about 10-20 times the size of bitcoin, dropped by 40% in a year, is the fed going to 'bail out' gold holders. I'm a bit confused by this.

 

30x the size

 

People expect bail outs for everything now. We've been doing them bigger and better every time since government bailed out Lockheed in 1971.

 

It's ingrained and people expect it I even if it doesn't make sense. A "bailout" of BTC is as simple as the government buying BTC ....which was the hope all along with the strategic reserve. But now, it's a bailout instead of a smart acquisition of strategic assets. Price leads narrative

 

 

Edited February 5 by TwoCitiesCapital

[Milu]

4 minutes ago, TwoCitiesCapital said:

 

30x the size

 

People expect bail outs for everything now. We've been doing them bigger and better every time since government bailed out Lockheed in 1971.

 

It's ingrained and people expect it I even if it doesn't make sense. A "bailout" of BTC is as simple as the government buying BTC ....which was the hope all along with the strategic reserve. But now, it's a bailout instead of a smart acquisition of strategic assets. Price leads narrative

 

 

I guess I just never thought we’d be getting to discussions around a government bailing out random assets that go down. Perhaps constellation software should get a bailout from the Canadian government, that’s down a lot right? And SAAS stocks have been hit hard to, perhaps the fed can buy a basket of CRM, Adobe, and Atlassian!

Edited February 5 by Milu

[TwoCitiesCapital]

I mean, the US government bailed out cruise lines nes that are incorporated in other countries, and use mostly non-US labor to save money, and avoid paying US taxes....and yet we still used US tax payer money to make emergency loans to keep those companies afloat in 2020. Why not others? 

Edited February 5 by TwoCitiesCapital

[gfp]

A bear flag suggests the price goes straight down.  Hence the term flag pole.  This is the "straight down" portion of the bear flag.  I've been posting about this over and over.

 

[UK]

12 minutes ago, gfp said:

A bear flag suggests the price goes straight down.  Hence the term flag pole.  This is the "straight down" portion of the bear flag.  I've been posting about this over and over.

 

'Education of value investor'

[Buckeye]

Is there any bailout language in the the Genius Act? The Genius Act…what a misnomer.  Hopefully Bessent is busy filing up the Strategic Bitcoin Reserve.

 

https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-president-donald-j-trump-signs-genius-act-into-law/

[KJP]

1 hour ago, gfp said:

A bear flag suggests the price goes straight down.  Hence the term flag pole.  This is the "straight down" portion of the bear flag.  I've been posting about this over and over.

 

 

I don't know if it was this thread or somewhere else, but I appreciated your point about the unusual price-supply dynamics of BTC and the relevance of charting to such an asset.  I'm sure you've heard the claim that charting is easy after-the-fact but fake in real-time, so I also appreciate you sharing your thoughts in real time.  

 

What is the signal from the chart that the bottom leg on a bear flag is over and the probability is that the price will turn up?

 

[gfp]

4 minutes ago, KJP said:

 

I don't know if it was this thread or somewhere else, but I appreciated your point about the unusual price-supply dynamics of BTC and the relevance of charting to such an asset.  I'm sure you've heard the claim that charting is easy after-the-fact but fake in real-time, so I also appreciate you sharing your thoughts in real time.  

 

What is the signal from the chart that the bottom leg on a bear flag is over and the probability is that the price will turn up?

 

 

It sort of depends on what you consider the 'flag pole' heading into the bear flag.  I would put the target at a range of prices between $66k and $56k.  I would use the 2022 playbook as a guide until the market shows you something is different.  So far, the market has NOT shown anybody that anything is different from the 2022 pattern.  It is so identical it is comical.  Note that in 2022 the market didn't just bottom and turn up to the races - it was a painful slog that convinced a lot of market participants to sell and move on.  Only then did it start to rise, eventually becoming another bull market

[Eldad]

CNBC headline “Bitcoin drops below 67,000 as sell-off intensifies and pessimism grows about the crypto’s function” 

 

these people….

 

 

[KJP]

6 minutes ago, gfp said:

 

It sort of depends on what you consider the 'flag pole' heading into the bear flag.  I would put the target at a range of prices between $66k and $56k.  I would use the 2022 playbook as a guide until the market shows you something is different.  So far, the market has NOT shown anybody that anything is different from the 2022 pattern.  It is so identical it is comical.  Note that in 2022 the market didn't just bottom and turn up to the races - it was a painful slog that convinced a lot of market participants to sell and move on.  Only then did it start to rise, eventually becoming another bull market

 

Thanks for the response.

[SharperDingaan]

2 hours ago, Milu said:

But what would be the purpose/need of a fed liquidity injection? If gold, which is an asset with about 10-20 times the size of bitcoin, dropped by 40% in a year, is the fed going to 'bail out' gold holders. I'm a bit confused by this.

 

Liquidity enables the BTC-Treasury's to sell paper, and buy more BTC ... pushing price up. Corporate/state/municipal treasurers roll new cash into BTC, pushing BTC higher, and capture the gains via derivative sales. Retail suddenly has no margin calls and 'buys the dip' ... further pushing the price up. Campaign buying, that is the opposite of the campaign selling everyone is talking about. Hence, the concept that the price of BTC is a function of liquidity.

 

BTC-Treasuries are desperately trying to persuade corporate/state/municipal treasurers that they should invest in 'crypto yield' securities ... versus long BTC and CME options/futures. If successful the corporate/state/municipal treasurers take dog sh1te in return, give up hard cash, and the BTC-Treasury gets beneficial ownership over their long BTC and CME options/futures ... to put up as additional margin collateral. When you can no longer buy BTC, try to 'rent' it instead.

 

More than a few BTC-Treasuries are now worth more dead than alive, with market caps < the MV of the crypto hoard. Debtors have incentive to force debt to equity swaps that will give them material majority control over the hoard, consolidate BTC-Treasury entities via merger, re-brand, rejig the capital stack, and emerge as oligarch competitors to a MSTR. Similar process around the miners, often the same lenders ... and all done with minimal/no fresh cash injection.       

 

Brutal, but it's a market process, long overdue, and a necessary part of the eco-system evolution. We're a quarter of the way through this century, and mom/pop de-fi is just not up to the robustness required of modern participants. Nobody likes it, but consolidation is inevitable.

 

It's going to hurt a lot of people, so give them some space.

 

SD

Edited February 5 by SharperDingaan

[SharperDingaan]

2 hours ago, TwoCitiesCapital said:

It's ingrained and people expect it I even if it doesn't make sense. A "bailout" of BTC is as simple as the government buying BTC ....which was the hope all along with the strategic reserve. But now, it's a bailout instead of a smart acquisition of strategic assets. Price leads narrative

 

+1

 

SD

[TwoCitiesCapital]

I guess I was too soon in dismissing the 4-year cycle. Thought that there were enough differences with the top being made pre-halving, secular ETFs flows, and no euphoric top or alts season that maybe we were breaking out of that. 

 

Next 12-months is a good accumulation zone if the cycle continues. Time will tell if 70+% declines scan still be expected or if secular demand from ETFs/institutions blunts it. 

Edited February 5 by TwoCitiesCapital

[Fly]

12 hours ago, Parsad said:

https://finance.yahoo.com/news/bitcoin-sinks-after-treasury-secretary-bessent-says-us-government-cant-tell-banks-to-bail-out-crypto-195504406.html

 

Cheers!

 

Bitcoin CEO isn't going to like this...

[Spekulatius]

On 1/31/2026 at 1:21 PM, Dalal.Holdings said:

Lol, doing TA now.

 

Bitcoin price targets are like talking about astrology. Go ahead and waste your time.

 

Now $78K. Guess the USD got even stronger?

 

Someone go check on Saylor…unfortunately he created path dependence over at MicroTragedy…

What else other than TA can you do if you want to trade bitcoin?  It’s not like there is an intrinsic value floor here.

[Milu]

1 hour ago, TwoCitiesCapital said:

I guess I was too soon in dismissing the 4-year cycle. Thought that there were enough differences with the top being made pre-halving, secular ETFs flows, and no euphoric top or alts season that maybe we were breaking out of that. 

 

Next 12-months is a good accumulation zone if the cycle continues. Time will tell if 70+% declines scan still be expected or if secular demand from ETFs/institutions blunts it. 

I always found the 4 year cycle a load of nonsense but I suppose if enough people believe in it then perhaps it becomes self fulfilling, I suppose many of the bitcoin bears would say the same about bitcoin 

 

Wasn’t 2025 a down year though which seems to break the 4 year cycle pattern, not sure what mental gymnastics people are going though to explain around that?