Stock to flow suggests around $150k… but all previous bull runs have exceeded this.
I think $150k could be well exceeded - $300k is feasible - especially when we find out that institutions have been buying these dips, major companies announce they’re holding BTC, and the crypto ETF gets approved by the SEC I’m early autumn.
Cash burn is minimal - I think PW mentioned monthly operating costs as around $2m per month.
Assessing revenue in $ is the root of the problem… assess revenue in BTC. Apply your assumptions re BTC price to that, and then you have revenue in $.
Yes there may be a the occasional period where ARB have to tap into their credit facility, or sell some BTC to fund monthly operating costs, but it’s peanuts relatively speaking.
I’d rather ARB use their credit facility; it’s no different from Michael Saylor buying BTC using debt on dips/lows - it’s a sensible strategy if you’re bullish on BTC.
Isn’t this BB about investing? We aren’t throwing money into a company expecting an instant return.
ARBs fundamentals are driven by many things, but price of BTC is by the biggest (followed by ARB’s share of total hashrate).
Yes, if BTC is going down then ARB’s value goes down, if BTC is going up then ARB’s value goes up.
If you think the price of BTC is going down/staying low then why on Earth would you invest in ARB.
If you think the price of BTC is going up/high then it’s an absolute no brainer to invest in ARB.
The share price is either a reflection of people not knowing what they’ve invested in and jumping ship, or traders/people looking to make a quick buck. As far as I’m concerned, only those bullish on BTC should be buying ARB, and if you’re bullish on BTC (and have a basic understanding of BTC mining), then you’ll know the value of ARB.
1. Yes, definitely. Mining is competitive, coins mined is a function of hashrate as a proportion of total hashrate. If total hashrate drops, ARB’s share of total hashrate increases and thus more coins will be mined.
It’s already evident in fact; total hashrate has dropped by 20% in the past fortnight. The next difficulty adjustment (next week) is likely to decrease by 15-20%, which means ARB will mine 15-20% more coins.
The other benefit of reduced hashrate is that mining transaction fees go up. Everybody forgets this. Currently this is probably negligible income relative to the value of BTC mined. During the height of bull runs, when there are lots of transactions, this can increase by orders of magnitude. Honestly, during the height of the next bull run, ARB could be making $1.5-2m per day ON TOP OF the value of the BTC they mine (potentially significantly more if their hashrate goes up, or total hashrate goes down).
2. Some have already started moving out of China. I imagine few could or would though.
All great news for ARB.
No blackouts in Quebec, and using renewable energy. Soon to have their own private solar installation in Texas.
Miners being shut down due to blackouts, or due to the impact on the environment = lower total hashrate = ARB with higher share of total hashrate = more BTC mined = more profit.
https://www.coinwarz.com/mining/bitcoin/hashrate-chart
I’m guessing we’ll see $38,000 tested for the rest of the week before a sharp bounce up to $54,000 next week for max pain when options expire.
Then the whales will drop it and start accumulating.
We’re talking about the greediest, most selfish group people on the planet here… they’ll take all they can.
Exactly what I’ve been saying for a few weeks now. BTC could drop in price by 50% but what if we start mining 2x the coins (extreme example)?
But I’m not sure we’re at that level of mining becoming unprofitable for miners just yet - it’s just miners being moved in China from dry locations to wet locations for the rainy season.
Also, RIOT used an average BTC price of ~$50,000 in their estimates. So with those margins, it costs RIOT ~$16,600 to mine 1 BTC.
It costs ARB ~$7.5k to mine 1 BTC.
So, if BTC were to crash, RIOT could be operating at a loss. ARB would still be profitable.
I actually think a crash in BTC could be a good thing for ARB, as it’d put the other miners under serious pressure. And perhaps they’d be willing to sell up some of their Antminers on the cheap…
ARB’s margins really are something else.
…and they’ll only go up with Texas too if ARB install their own solar capacity too.
Also, RIOT and MARA’s margins will only decrease (when removing BTC price movement) relative to ARB’s as they keep buying Antminers which cost something like 5x what they cost 3 months ago!
In a year’s time, I reckon we’ll look back at getting into bed with ePic as a genius move.
I saw a similar vid early last week and noticed the dates on the chart…
The timelines seemed to suggest that the major sell off would be happening late April/early May - but BTC is still at £40k.
No doubt that IIs are accumulating - they want to be able to control the crypto sphere as much as possible - but I think they’re having a really hard time dropping the price. The resistance at $42,600 has been incredibly strong.
I think the IIs keep lowering the price only to find considerable buying pressure from other institutions/whales/retail investors.
Huge battle going on right now.