I now prefer to hold Bitcoin (BTC) over stock indices due to the cost of producing bitcoin increasing every 4 years due to block halving.
The NIFTY closed at INR 4,450.4 on the 1st of June 2009 and closed at INR 11,922.8 on 31st May 2019 leading to a 267.9% increase in capital. This is a very high return for a stock market investment because the stock market was on its way out of a severe bear market in 2009 and has not seen a severe bear cycle for the last 10 years.
Bitcoin's most recent bear cycle started its recovery in December 2018 after dipping to a low of USD 3,128.9/BTC and is currently over USD 8,500 per BTC. USD 3,500 was the estimated cost per bitcoin that the lowest cost producers of bitcoin were producing at 0.03 USD/KwH of electricity costs or it could have been the estimated cost of bitcoin without taking electricity costs into consideration (in cases of solar powered mining) given that USD 8,000/BTC is around the estimated average worldwide cost of producing bitcoin at 0.06 USD/KwH of electricity costs with cooling and land renting costs taken into consideration. (https://www.marketwatch.com/story/heres-how-much-it-costs-to-mine-a-single-bitcoin-in-your-country-2018-03-06).
The prices of USD 3,500 as shutdown prices and USD 8,000 as average cost of production are set to double in less than a years time when Bitcoin mining block rewards reduce from 12.5 bitcoins to 6.25 coins for every block mined:
https://www.bitcoinblockhalf.com/
In the history of bitcoin, there have only been 2 times when block halving has taken place before. One of which was in 2012 and another in 2016:
https://www.forbes.com/sites/billybambrough/2018/05/29/a-bitcoin-halvening-is-two-years-away-heres-whatll-happen-to-the-bitcoin-price/#765706af5286
https://www.ccn.com/bitcoin-surged-10x-2016-halving-2020-similar-result
I am holding onto bitcoin with the plan of adding more in the event that bitcoin once again falls to its next shutdown price or average cost of production post its 2020 block halvening.
The NIFTY closed at INR 4,450.4 on the 1st of June 2009 and closed at INR 11,922.8 on 31st May 2019 leading to a 267.9% increase in capital. This is a very high return for a stock market investment because the stock market was on its way out of a severe bear market in 2009 and has not seen a severe bear cycle for the last 10 years.
Bitcoin's most recent bear cycle started its recovery in December 2018 after dipping to a low of USD 3,128.9/BTC and is currently over USD 8,500 per BTC. USD 3,500 was the estimated cost per bitcoin that the lowest cost producers of bitcoin were producing at 0.03 USD/KwH of electricity costs or it could have been the estimated cost of bitcoin without taking electricity costs into consideration (in cases of solar powered mining) given that USD 8,000/BTC is around the estimated average worldwide cost of producing bitcoin at 0.06 USD/KwH of electricity costs with cooling and land renting costs taken into consideration. (https://www.marketwatch.com/story/heres-how-much-it-costs-to-mine-a-single-bitcoin-in-your-country-2018-03-06).
The prices of USD 3,500 as shutdown prices and USD 8,000 as average cost of production are set to double in less than a years time when Bitcoin mining block rewards reduce from 12.5 bitcoins to 6.25 coins for every block mined:
https://www.bitcoinblockhalf.com/
In the history of bitcoin, there have only been 2 times when block halving has taken place before. One of which was in 2012 and another in 2016:
https://www.forbes.com/sites/billybambrough/2018/05/29/a-bitcoin-halvening-is-two-years-away-heres-whatll-happen-to-the-bitcoin-price/#765706af5286
https://www.ccn.com/bitcoin-surged-10x-2016-halving-2020-similar-result
I am holding onto bitcoin with the plan of adding more in the event that bitcoin once again falls to its next shutdown price or average cost of production post its 2020 block halvening.
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