Bitcoin Mining in NY Costs Premium: Bitcoin Headed to $2,800?

Utilities in New York will now charge extra to mine Bitcoin. In unrelated news, technicals point to a $2800 price.

I am surprised it took this long, but here's news on Bitcoin mining costs: Want to Mine Bitcoin in New York? You'll Have to Pay a Premium.

The New York Public Service Commission on Thursday cleared the New York Municipal Power Agency to raise electricity bills for cryptominers seeking to take advantage of the state’s low-cost hydroelectric power. The agency is made up of 36 municipal power authorities in the state. In some cases, the miners -- which require huge amounts of electricity for data processing -- accounted for a third of a municipal utility’s demand, the commission said.

“If we hadn’t acted, existing residential and commercial customers in upstate communities served by a municipal power authority would see sharp increases in their utility bills,” Commission Chair John Rhodes said in a statement

Bitcoin Death Cross?

Bitcoin’s 50-day moving average has dropped to the closest proximity to its 200-day moving average in nine months. Crossing below that level -- something it hasn’t done since 2015 -- signals fresh weakness to come for technical traders who would dub such a move a "death cross." Another moving-average indicator of momentum has already turned bearish.

“There’s been a definitive shift over the past couple of months after the bubble activity at the end of 2017,” said Paul Day, a technical analyst and head of futures and options at Market Securities Dubai Ltd.

The strategist studied the virtual currency’s 2013 tumble for clues on how it may act this time round. His conclusion? Gear up for a 76 percent tumble from late February highs, which would take Bitcoin to a paltry $2,800, if the downtrend is repeated.

Another gauge that suggests weakness is the moving average convergence-divergence indicator, which measures price momentum to flash buy and sell signals.

In regards to the "Death Cross", I pay little attention. Then again, I fail to see why Bitcoin is worth much of anything. But bubbles are bubbles. That's how bubbles work.

In regards to extra charges, it is absurd that Bitcoin is draining public utilities. It's a seriously flawed design. And the party ends when it costs more to mine a bitcoin than the Bitcoin is worth. Right now that price is about $2,500, I am told.

Some believe that can't happen. I believe it will.

Peek Inside a Mining Operation

Finally, think of all the stress on the electrical grid if Bitcoin hits those inane $1,000,000 price targets. How much competition and grid stress will there be for $1,000,000 coins.

Idiot's Game

Bitcoin is an idiot's game at this point. The Bitcoin Fad is Fading Fast.

Mike "Mish" Shedlock

Comments
No. 1-25
Unicorn Hunter
Unicorn Hunter

Very likely although it is possible that it evolves to become a better protocol over time. Much as etherium has implemented lots of new features making it a stronger competitor over time

Unicorn Hunter
Unicorn Hunter

Only the least efficient miners can't make money, they drop out and there share of the mining rewards are then realocate to the more efficient mining operations

Unicorn Hunter
Unicorn Hunter

No, adjusting difficulty ensures that the number of coins created is always in line with what the designer of bitcoin predicted regardless of how many miners are present in the system

Unicorn Hunter
Unicorn Hunter

People lose interest every time it crashes and it has a major crash once a year and 3 or four minor crashes a year . Anyone who has held for a year or two knows this

Ambrose_Bierce
Ambrose_Bierce

NY has its reasons while other regions will see the economic advantage of providing cheap electricity to attract bitcoin miners. Bitcoin mining will provide tax revenue. For the time being mining activity adds more Bitcoin (money velocity) to the system. The crypto digital float will increase and decrease according to economic activity unlike the Central Bank fiat system which inflates the base when it wants more economic activity. Bitcoin isn't money it's electronic barter, and so has the potential to translate goods and services anywhere.Right now a worker in China gets a lot less than the same worker in the US. Strip away the BIS, Fx markets, rentier class global bankers and stock holders who get rich by borrowing money to speculate on paper gains leverage on the disparity. This iteration may or may not survive but the technology is here.