Member Info for HarChris

'Ain't it cheaper to buy the bitcoins instead of mining them.'

Sure, temporarily, but as machines start being switched off the difficulty will come right down and those still mining will start minting many more coins than before. For example if company X's operations cost $12.5m in total and they are mining 500 coins a month then technically each coin is costing ~$25k to mine, but if difficulty reduces by half company X is now mining 1000 coins at a cost of $12.5m so the price to mint each coin is now just $12.5k - they can start selling them for $18k and be profitable.

Others that can withstand an operational loss for a little while will continue to mine and hold in the hope that bitcoin rebounds and they can then sell for a tidy profit once the cash runway is depleted.

Four months is going to feel like two years, bear markets are tough - of course it could be many months either side of that too. If markets start recovering before October then Argo's share price in the 20s is going to multibag, if it goes the other it may never fully recover. That's the risk at this stage.

So much pressure was placed on PW not to go in too hard with the equity raises in 2020 and to commit to no more dilutive financing - what a difference a big chunky raise at 75p at the start of the year would have made now.

It's hard to see bitcoin recover in the very near term because there are just too many red flags - there is going to be more crypto lenders like Celsius going to the ground, tens of thousands of bitcoin will be dumped by miners to keep the lights on and there will be tons of margin calls. + US markets looking wobblier than they did in March 2020.

Personally I'm going to try to sit on the sidelines for at least a few weeks and then think very carefully about which miners to take a further risk on.

I think you're right, it can't go to zero or at least won't in the next decade but even $18k for six months will make many of the miners uninvestable on the flip side (zero HODL and debt up too their eye balls)

Hexam let's be honest, either these people you're referring to aren't very bright and don't understand the risks or they are just trying to make themselves feel a bit better about the situation.

I'm with you, I think bitcoin will recover but it's hard to see it happening until the US markets start recovering.

Things could start getting interesting but it's still a bit early for that. Don't forget until recently miners weren't selling a single bitcoin, they had enough funds to run operations through placings and borrowings. I suppose now the small miners with no BTC holding will start unplugging machines and the listed miners will choose between selling their HODL and switching off machines. A few months without any BTC recovery and pressure will start building enormously.

I guess it recovers when broadly speaking there is a consensus that the bottom is in and investors feel happy buying and institutions consider it a chance to build a position - I imagine they'll be weeks of volatility before that occurs.

poorinvestor is simply doing what Saylor told him to do but hasn't quite committed fully - if he had there wouldn't be a garage to move into if this goes tits up.

Does anyone actually think the Russian economy is thriving? Are we expecting their GDP to rise and for the country to return to its glory days? No, the strong rouble is simply masking the reality.

There's a slight added risk to Argo now as they were planning to sell BTC to make up the rest of the capex needed to fit out Helios - what they can get for their BTC now is only 50% of what they could when they announced this on April 27th.

Riot for example have been selling bitcoin since at least early March.

There are multiple threats for bitcoin right now however. You've got the price lower than the $21k the former CFO of microstrategy said would trigger a margin call (Saylor rowed way back on that), we know miners are going to be feeling the pinch and could well be dumping considerable portions of their holding to shore up their balance sheets, pressure is mounting on the main markets as everyone waits to see what move the Fed takes this evening, recession looking inevitable, the drop is putting pressure on El Salvador and its looming Sovereign bond repayments etc etc

This is a recipe for at least a sustained period of $20k or lower BTC.

I'm not invested here, I'm looking to the US miners with more cash on hand - still I think the hundreds of millions spent on rigs and machines they acquired over the past eighteen months props up the balance sheet and won't become worthless just because BTC has dropped. There is an enticing risk/reward at this price.

They raised $160m from placings in 2021, today's market cap is $180m, the company has invested massively and the majority of that is not debt - they are definitely in a better position than they were 2 years ago where they were struggling to keep afloat.

It does 'feel' like there is at least weeks if not months of hardship still to come but I'm not convinced Argo goes *that* much lower otherwise it will be pricing in a high chance of bankruptcy which at this stage is extremely premature.

I think we're talking about different things, you bitcoin and me the miners. We can look at previous cycles to get an idea of what bitcoin will do, not exact as the space is very different now but history is always useful and somewhat informative. But what happens to the miners is much more complicated and complex. It's far too early for there to be existential threats but we might start hearing about expansion plans being put on hold, of more bitcoin being sold, of EH targets being reduced.

With bitcoin at $20k CEOs soon should be out there discussing their strategy going forward, giving more detail on their financial situation etc to give investors an idea of what to do, buy/hold/sell.

I'm talking about how the miners will cope with a potential painful bear cycle and you're saying look at the past cycles to understand. No, there is nothing to compare, we didn't have behemoth miners with humongous operations and debt last time around, most of the big NA miners didn't even exist four years ago.

I don't think miners had invested hundreds of millions into new rigs and facilities prior to the last bear cycle Hope...

That's pretty much my point, 'prepared for winter' is a bit vague... what does the winter he is referring to look like? Bitcoin at $30k? Or bitcoin at $20k, or even $12k? How long is the winter he is referring to? Is it three months like the actual season or is it 21 months? Are they able to hibernate somewhat through this metaphorical winter? Are they aiming to come out of it with some HODL remaining?

Has any CEO done an interview in the past few weeks? It would be interesting to hear what the management of Argo, Riot, Bitfarms etc have to say about their strategy going forward. I suppose we'll start getting insight soon as the next month's figures come in and the commentary alongside.

Hi crl123 - I didn't exactly buy the bottom sell the top, I reduced at 151p which looks okay on paper now I suppose, especially if I buy them back. I agree with you I've just got to decide whether or not I'm happy to wait it out that long, in truth I've felt better recently with a smaller holding as at times I was rather overexposed here.