Satoshi Nakamoto’s Theory on Asset Price and Production Cost $BTC

Satoshi Nakamoto proposed that the price of an asset tends to converge with its production cost. He explained it as follows:

1. Price Below Cost When the price of an asset falls below its production cost, production slows down as it's not profitable to continue.

2. Price Above Cost: Conversely, when the price is above production cost, producers can profit by increasing production and selling more. However, this increased production raises the difficulty level, thereby increasing production costs.

In later years, as the generation of new coins becomes a smaller percentage of the existing supply, the market price will more significantly influence production costs than vice versa.

We are currently in the fifth occurrence where the miner price is lower than the cost of electricity. This pattern aligns with Nakamoto's theory, indicating that production costs and market prices have a cyclical relationship. #BTC