When Bitcoin was trading above $60,000, the smartest analysts and financially minded people told investors that the price of BTC would never fall below its previous all-time high.
These same individuals also said that $50,000 was a dip buying opportunity, and later said that $35,000 was a generational buying opportunity. Later, they also suggested that BTC would never drop below $20,000.
Of course, “now” is a great time to buy the dip, and you would think that buying BTC at or below $10,000 would also be the purchase of a lifetime. But by now, all the so-called “experts” have fallen silent and are neither seen nor heard.
So investors are left to their own devices and their thoughts to contemplate whether or not the bottom has been reached. Should one be patient and wait for the predicted “drop to $10,000” or is now the time to buy Bitcoin and altcoins?
Calling price touches is usually a futile task. What is really important is to focus on whether or not there are fundamental reasons to choose or not to invest in Bitcoin.
Sure, the price has changed dramatically, but have the fundamentals of the Bitcoin network and the infrastructure surrounding Bitcoin as an asset improved or degraded? It is important to delve into this data because, for investors, this is where one should base their confidence and investment thesis.
Precisely for this reason, Cointelegraph organized a space on Twitter with analysts Joe Burnett of Blockware Solutions and Colin Harper of Luxor Mining. Here are some highlights of the conversation.
Stock Markets Will Decide When Bitcoin Price Can “Go Back Up”
According to Joe Burnett, an analyst at Blockware Solutions, the price of Bitcoin is highly affected by Federal Reserve policy and its impact on equity markets. Burnette said:
“The macro environment is obviously weighing heavily on Bitcoin price. High CPI inflation has led to a hawkish Fed since Nov 2021. Higher interest rates inevitably drive all assets down. Interest rates are basically gravity of financial assets, just basically discounted cash flow analysis. And these rising interest rates are an attempt to destroy demand and and destroy inflation by the Fed. Obviously it’s putting pressure on all risk assets, including Bitcoin.”
When asked about the on-chain Bitcoin hash tapes indicator suggesting that BTC has bottomed out and miners have capitulated confirming that Bitcoin’s bottom has hit, Burnett said “I think with every type of metric of the type on-chain, you definitely have to take it with a grain of salt. You can’t look into a vacuum and say, yes, bitcoin has bottomed out.”
Burnette said:
“If US equities make new lows, I certainly expect Bitcoin to follow. That being said, if you look at Bitcoin fundamentals, I think minor caps often mark Bitcoin lows. And a hash-driven indicator that Charles Edwards has created is basically representing that there was a minor capitulation this summer.
Synergy between big energy companies and Bitcoin miners is a positive factor for BTC
Discussion of the growing partnership between large energy providers, oil and gas companies, and industrial-sized Bitcoin miners has been a hot topic throughout 2022, and when asked about the direct benefits of this relationship For Bitcoin itself, Colin Harper said:
“I don’t think mining does anything bad or good for Bitcoin. I think it’s good for Bitcoin in the sense that in the long run it will strengthen the security of the network, decentralize mining and put it basically in every corner of the world.” if there are energy producers mining. But in terms of doing something for the price, I think it’s just kind of a case of broader adoption. And as for whether or not people will use it in their day-to-day as a medium of exchange , store of value and as an investment in general”.
Harper added: “If these companies start using it, it’s going to be more acceptable. It becomes less stigmatized. Depending, I guess, on the oil producer and that person’s politics.”
When asked about what the mass adoption of Bitcoin could look like in the future, in relation to the growth of the mining industry, Harper explained that:
“It’s going to be a matter of time before they start integrating Bitcoin into their stacks. And I think that’s when things get interesting in terms of mining as an industry, because if you have the energy producers and the people who own the energy mining Bitcoin so that makes it very difficult for people without those assets to eventually make a profit because you’re going to see the price of the hash, which is already trading down over time, you can imagine a future where only the producers and those who are invested in or integrated into the energy producers can make a profit from their bitcoin mining.”
Regulation and growing desire to self-custody will fuel the growth of the Bitcoin Lightning Network
Both analysts agreed that while it may take a handful of years, Bitcoin’s layer 2 growth potential is bright. Burnett predicted that “over time, more and more people will learn to demand final settlement of their Bitcoin, which means more people will have keys of their own.”
According to Burnett
“If Bitcoin adoption grows by 100x or 1000x, there is going to be a lot more competition for scarce block space and on-chain fees are probably going to go up just because people are going to demand a lot more settlement, magnitudes more settlement at the base layer. “But the block space to settle in the base layer is fixed. So these on-chain fees going up basically, in my opinion, potentially making the lightning channel liquidity that’s already open and available. It’ll make it more valuable.” .
Harper fully agreed, adding that in his opinion, the Lightning Network “will be what allows Bitcoin to be used as a global medium of exchange and also, as Jack Maller has said, it is what can separate Bitcoin, the asset, from Bitcoin.” , the payment network in a way that is really scalable.”
tune in here to listen the complete conversation of the Twitter Space.
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