Nov 27, · As of 26 November , Bitcoin is trading around US$9, That is an increase of about 2,% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec , 1 Jul ), especially when . As of 26 November , Bitcoin is trading around US$9, That is an increase of about 2,% since I wrote the article prognosticating this fourth great Bitcoin bull market. I sure like being right, like usual (19 Dec , 1 Jul ), especially when there are financial and economic consequences. Although the bitcoin market’s recent volatility may feel familiar to industry veterans, the circumstances are very different in than they were when bitcoin (BTC) surged to nearly $20, in.
The great bitcoin bull market 2017The Great Bitcoin Bull Market Of
And, since gold exists at a single point in space and time therefore it is subject to confiscation or seizure risk. Bitcoin is a completely new asset type. If the transaction is not on the blockchain then it did not happen. This is the strictest regulation possible; by math and cryptography! This new immutable asset, if properly secured, is subject only to exchange rate risk. There does exist the possibility that a software bug may exist that could shut down the network, like what has happened with Ethereum , but the probability is almost nil and getting lower everyday it does not happen.
Thus, Bitcoin arguably has a lower risk profile than even gold and is the only blockchain to achieve security, scalability and liquidity. To remain decentralized, censorship-resistant and immutable requires scalability so as many users as possible can run full-nodes.
Some people, probably mostly those shilling alt-coins, think Bitcoin has a scalability problem that is so serious it requires a crude hard fork to solve.
On the other side of the debate, the Internet protocol and blockchain geniuses assert the scalability issues can, like other Internet Protocols have done, be solved in different layers which are now possible because of Segregated Witness which was activated in August Whose code do you want to run: the JV benchwarmers or the championship Chicago Bulls? As transaction fees rise, certain use cases of the Bitcoin blockchain are priced out of the market.
And as the fees fall then they are economical again. Additionally, as transaction fees rise, certain UTXOs are no longer economically usable thus destroying part of the money supply until fees decline and UTXOs become economical to move. What I like about transaction fees is that they somewhat reveal the financial health of the network. The security of the Bitcoin network results from the miners creating solutions to proof of work problems in the Bitcoin protocol and being rewarded from the 1 coinbase reward which is a form of inflation and 2 transaction fees which is a form of usage fee.
The higher the transaction fees then the greater implied value the Bitcoin network provides because users are willing to pay more for it. I am highly skeptical of blockchains which have very low transaction fees. By Internet bubble analogy, Pets.
Bitcoin and blockchain programming is not an easy skill to acquire and master. Most developers who have the skill are also financially independent now and can work on whatever they want. The best of the best work through the Bitcoin Core process. After all, if you are a world class mountain climber then you do not hang out in the MacDonalds play pen but instead climb Mount Everest because that is where the challenge is.
However, there are many talented developers who work in other areas besides the protocol. Wallet maintainers, exchange operators, payment processors, etc. Consequently, there is a huge shortage of competent developers. This is probably the largest single scalability constraint for the ecosystem. Nevertheless, the Bitcoin ecosystem is healthier than ever before.
There are no significant global reserve settlement currency use cases for Bitcoin yet. Perhaps the closest is Blockstream's Strong Federations via Liquid. There is a tremendous amount of disagreement in the marketplace about the value proposition of Bitcoin. Price discovery for this asset will be intense and likely take many cycles of which this is the fourth.
Since the supply is known the exchange rate of Bitcoins is composed of 1 transactional demand and 2 speculative demand. Maybe in the new world, something gets backed by consensus. Thus, it is no surprise that the Bitcoin chart looks like a ferret on meth when there are such widely varying opinions on its value proposition. I have been around this space for a long time.
Interestingly, the people who understand it the best seem to think its financial dominance is destiny. Meanwhile, those who understand it the least make emotionally charged, intellectually incoherent bearish arguments. A tremendous example of worldwide cognitive dissonance with regards to sound money, technology and the role or power of the State. Consequently, I like looking at the day moving average to filter out the daily noise and see the long-term trend.
Well, that chart of the long-term trend is pretty obvious and hard to dispute. Bitcoin is in a massive secular bull market. So, what do some proforma situations look like where Bitcoin may be undervalued, average valued and overvalued? No, these are not prognostications.
We are in a very unique period of human history where the collective globe is rethinking what money is and Bitcoin is in the ring battling for complete domination. Is or will it be fit for purpose? As I have said many times before, if Bitcoin is fit for this purpose then this is the largest wealth transfer in the history of the world. Well, this has been a brief analysis of where I think Bitcoin is at the end of November The seven network effects are taking root extremely fast and exponentially reinforcing each other.
The technological dominance of Bitcoin is unrivaled. The world is rethinking what money is. While no one has a crystal ball; when I look in mine I see Bitcoin's future being very bright. Currently, almost everyone who has bought Bitcoin and hodled is sitting on unrealized gains as measured in fiat currency.
That is, after all, what uncharted territory with daily all-time highs do! But perhaps there is a larger lesson to be learned here.
Riches are getting increasingly slippery because no one has a reliable defined tool to measure them with. Times like these require incredible amounts of humility and intelligence guided by macro instincts. This week, OCC gave national banks green light to store bitcoin and other cryptos for its clients. Source: ScottMelker. This week, the Federal Reserve took little action at its meeting but gave dovish signals to investors while highlighting its worries about the impact of COVID on the US recovery.
The Fed is hoping that Congress will renew its fiscal stimulus while stating its willingness to add monetary support. It has floored it and is still flooring it. Another worry is that Congress struggles to reach a deal renewing fiscal stimulus. The Fed may have held off any big adjustments to its monetary policies for now, as equity prices rebounded sharply from March lows while the US dollar weakens to a two-year low, but it could be coming soon and could set the stage for the next time it meets again in September.
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments. E-mail is already registered on the site. Please use the Login form or enter another. You entered an incorrect username or password.
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