Well, what is going on with Bitcoin? A lot of people are stunned and do not how to answer this simple question. An energy discussion (actual report from Galaxy says Bitcoin is on 114 TW/H and Banks at all on 260 TW/H)? No. A discussion of Elon Musk’sMusk’s statements that said Bitcoin is centralized by miners? (Hint: Bitcoin network runs on nodes, not on miners, and if the nodes decide to change the terms miners can work, miners will get serious trouble)? No.
So what is the answer to a dump of Bitcoin’sBitcoin’s price nearly $20,000 Dollars from the latest all-time high?
Business as usual. Right heard. Bitcoin is just pending around the breakpoint between real value and traded value. First is a price measurement against goods and utilities. This occurred first in 2009 with Pizza Day, followed by Silk Road and the first merchant trades. Those trades have been created when people used Bitcoin as a direct payment. Following the lead, the real Bitcoin price is around 40,000 Dollars, and the traded price is much higher.
Today we have a competition between different markets:
OTC, Future, ETF, DeFi, and Margin Trades
What does this mean for the price? Speculation. This is the hardest part of price predicting.
All of these markets influence the market cap today. In the beginning, they had not a real impact because enough Bitcoins have been shared over OTC. Another point there was no will sell Bitcoins or lend Bitcoins. Bitcoin was increasing in the way of up and downs all the time. This is no exceptions. The volume of the non-bitcoin markets is the reason why you see these price movements—locking Bitcoins for the purpose of a Bitcoin-related market in DeFi systems or as stability does not make sense and hides the risk of inflation. Exchanging back to a higher price kills the benefit. For example, you make trades with a renBTC or wBTC. The value from BTC is, for example, $40,000, then it jumps to $55,000. Your trades are running on the DeFi network. So, you can access your Bitcoin. At the end of the day and after contracts running out, the Bitcoin price is back at $41,000. So, you lost $14,000 Dollar. No trade on a DeFi could make that equal. The more BTC you locked for renBTC or wBTC, or other BTC-related tokens, the more lost you make. If you put in DeFi 5 BTC, your loss would have been $70,000 Dollar.
What do you think about how ETF and Futures influence the price? OTC markets naturally dry if the price is low. People losing their bets must buy or sell on Exchanges instead. If they go short means, they pressure the Exchanges with thousands of Bitcoins. The price is on a downtrend.
Today we know it is not. Micro Strategy just bought more Bitcoins. Elon Musk’sMusk’s friends jump on board with Millions of invests because the price is even now higher than gold and the expectation of a better fiat market. Why playing around with Doge? Because Elon Musk does not in the value of a cryptocurrency, and he wants to show only influence Crypto Twitter will change the markets.
Bitcoin is not impressed
If you are a long time in Bitcoin, well, you know best. What you see is not what you get. So you hold on and wait. And of course, this is the best advice today—business as usual. The AltCoin season starts a consolidation in downsize against Bitcoin. And DeFi token does not have to appear in a Cornmarket list. Why? They are all based on the old industry and money economy.
Bitcoin and Cryptocurrencies are the new way of how money (cash) is handled nowadays.
DeFi is purely centralized in the old fiat world. It is just an intermediary for online trades. In other words, this likes PayPal if they would have a marketplace. No one of the DeFi tokens is used for a future money system because they are not money and not a cryptocurrency.
NFT is not a BTC business. DeFi is not a BTC business. Even stable coins do not have to appear in a coinmarketcap list, where you find BTC.
If you filtered this market cap between the use case and purpose of tokens, you would likely see Bitcoin has a dominance from around 70%, and this is enough to know and understand why Bitcoin will re-bounce in the next few days. The trade volume behind Bitcoin outside the financial markets is growing. The demand for Bitcoins reached new all-time highs.
Bitcoin is going Taproot?
The biggest impact for a long time is keeping the vision of a decentralized world with a world currency that cannot be stopped by governments and is resistant to money rules.
With Taproot, three factors will be enabled:
- Anonymous transactions (confidential transactions)
- Smart Contract support
- Usage of Schnoor signatures
Compared to SegWit, 90% of the nodes must adopt Taproot to run. Now we are on voting block 210 from 2016 (as the time of writing). What does this mean? Bitcoin has a difficulty factor. If we increase the hash power of the Bitcoin network with more miners, the average time of 10 minutes finding a block will be interrupted. The protocol will set back the difficulty after 2016 mined blocks, and the miners need again average, ten minutes to find a block. Same if the number of miners decreases suddenly. Lock in time means an agreement of Nodes owner to support the implementation or not. Two thousand sixteen blocks mean 14 days. This is the time where they can decide to accept Taproot or not.
If they accept, a time will be set for the soft fork of Bitcoin, and Taproot will be activated. Bitcoin’s independence becomes new privacy skills. This will directly impact companies like chainanalysis and other blockchain tracing companies. If you want to stay anonymous, you can use the lightning network, but for an average user, it is too complex to understand (even if it is easy) they want to stay on one wallet. The Taproot will solve this problem.
Jimmy Song wrote just:
“Every alt season repeats the same pattern. There’s a celebration among the altcoiners not because they’ve endured through the bear market as Bitcoiners have, but because they’ve made money trading something new. Despite the complete lack of technical understanding, market incentives, or even what the coin or product is supposed to do, they seem to make money hand over fist. There’s a huge temptation to start trading and make some extra Bitcoin and glory in your riches.”
Most of all, you pay high taxes. This should avoid you doing this. There only a few good traders but most of them not worth notifying. Finally, the taxes, for example, in the US, are at 40 percent. So, what do you expect to gain? Leaving your Bitcoins and wait is more than this in one year. Without supporting the old-world economy, which is the reason, you are here. Because your old world still suffers and fails.
And another reason: So far, more than $240 Million Dollars have been stolen from the DeFi market because the hype has no security.
Unbelievable, but if you imagine, Ethereum Miners have raised $89 Million Dollars on fees in one day. Question: Paying taxes, high fees, what is the difference to the old economy?
The difference is: Bitcoin
Written by : Prof. (Dr.) h. c. Joerg Molt