Saturday, August 13, 2022

Experts on why bear markets are good for Bitcoin

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Bitcoin and the general cryptocurrency market have been experiencing one of the vital moments since 2018, wiping more than $1 trillion in market worth since early 2022.

The present disaster has triggered a wave of panic locally, with Bitcoin  (BTC) miners’ selling activity surging to seven-month highs as mining profitability has dropped to October 2020 ranges.

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The Bitcoin Concern & Greed Index has posted the lowest number since the pre-pandemic times of Q3 2019, dropping to 7 and indicating “Excessive Concern” on Wednesday.

These and different current occasions within the trade don’t look good — however solely at first look, in accordance with some trade consultants and executives.

Individuals within the trade proceed to reiterate that bear markets are actually good for Bitcoin and wholesome for the crypto trade, as they take away speculators and scams whereas offering house to construct actual and nice services.

“The present state of affairs is sweet for Bitcoin in the long run, cleaning the market from leverage, scams and dishonest establishments,” Trezor Bitcoin analyst Josef Tětek informed Cointelegraph.

In keeping with Tětek, earlier bear markets spawned many pivotal tasks, together with the Lightning Network, a significant Bitcoin-related challenge enabling cheaper, sooner Bitcoin transactions. The preliminary idea of the Lightning Community was formulated through the bear market of 2015.

Crypto winters and bear markets present extra alternatives to construct, as hypothesis leaves the market, Tětek famous, stating:

“Bear markets are good for Bitcoin. Builders face fewer distractions, and the faux ‘challenge founders’ that have been solely in search of a fast VC funding and naive retail exit liquidity disappear as rapidly as they beforehand appeared. Actual builders rejoice when all of the bullshit will get washed out.”

The crypto market must undergo crypto winters as a way to develop and mature, Bitcoin Suisse CEO Dirk Klee informed Cointelegraph. In keeping with the chief, the standard, stability and safety of crypto providers and merchandise develop into much more necessary throughout unsure market circumstances. He mentioned:

“Finally, that’s what the trade wants as a way to mature additional, and we purpose to dwell as much as these requirements each single day.”

In the same solution to broader markets, Bitcoin and the whole cryptocurrency ecosystem have traditionally advanced in cycles, with many crypto observers arguing that Bitcoin has “by no means traded beneath earlier cycle peak.”

In keeping with Kraken CEO Jesse Powell, Bitcoin value cycles are primarily based “kind of across the Bitcoin halving,” a one-in-four-years event that reduces the Bitcoin block reward by half, which has traditionally elevated Bitcoin’s demand and eventually led to bull markets.

Associated: ‘Cheaper than it looks:’ Fidelity exec says BTC undervalued and oversold

Powell is thought for precisely predicting the crypto winter of 2022. His earlier prediction that Bitcoin would hit $100,000 by the tip of 2021 failed, nonetheless.