Aapje
Golden Member
- Mar 21, 2022
- 1,530
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That may be true for some home miners, but I I think that the professionals that did most of the mining have a much more simple business model than you think. Just mine & sell. Ultimately, the very fact that GPU mining revolved around Ethereum so much is quite inconsistent with your beliefs. If you were right, they would already have favored more speculative coins over ETH.
Betting on minor coins becoming (temporarily) popular is inherently a niche activity. If too many people do it and try to sell during a rally, the speculators will have so many coins to sell that the price will only go up slightly even during a rally, due to how many coins are for sale.
For example, imagine that small towns sometimes become popular to live in, because of some tourist thing. Then 1000 people move in and drive up the housing prices. You might speculate on that by building a few houses in small towns and then renting those out at a small loss. Then you get a nice profit for the houses in boom towns, more than making up for your small losses in the towns that never becomes unpopular. Now imagine that a ton of people do the same and they together build a million houses in each small town. When those 1000 tourists move in, they won't buy more than 1000 houses. The other 999,000 houses will never be sold to a tourist and no profit will ever be made on them. It's a strategy that works less and less as more people do it, just like speculative mining.
Like I've said so many times before, this is a basic lack of understanding about economics. If demand stays constant, then the number of buyers goes down as the price goes up. However, during the mining craze, demand went way up. There was a new group of buyers with a willingness to buy many cards at very high prices. Of course, there were also gamers that bought for those prices, but those were far fewer than the number of gamers that would have bought those cards for more normal prices.
However, now those miners are pretty much gone from the market and you cannot conclude that millions of gamers will take their place and will be willing to buy the same number of cards at those high prices. In fact, we've already seen that they won't, because prices went down and cards are now massively in stock again. Nvidia told their investors that even at much lower prices than during the crisis, they are selling way fewer cards.
So the evidence against your false narrative is staring you in the face...
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