What is sugar for kids? For most bulls in the Bitcoin cryptocurrency market, it is the Bitcoin half.
Halfway activity will further reduce Bitcoin supply by algorithmically reducing the daily production rate from 1,800 BTC to 900 BTC. People believe that less supply will inflate Bitcoin prices in the long run, and a famous Bitcoin model predicts that by 2021 the price will reach $ 100,000.
However, an analyst who writes under the pseudonym ‘Alex’ thinks the bulls are making deceptive price estimates about Bitcoin, and argues that the asset could continue to collapse in the year due to the cryptocurrency’s forced sales of inefficient miners’ assets.
“Bitcoin is a relatively easy market to manipulate, mostly traded on emotions and momentum. A few people will be manipulating that the price will increase. ” said. The analyst also said, “After the split, inefficient miners will be forced to sell their assets. that’s a real risk. ” he added, adding to his words.
Bitcoin Under Sales Pressure
Miners add and operate specially designed platforms in the Bitcoin blockchain that validate transactions and add transactions to them. In turn, they receive rewards in the form of Bitcoin tokens.
Following the next halfway activity, miners will put the same amount of operational cost to operate their equipment; however, their returns will decrease. This will leave inefficient miners with two options: They should either continue this way or shut down their equipment completely.
“The only way out is to upgrade the processors: leave the old Dragonmint T16 and Antminer S9 machines to 5 and 3 NM miners with higher processing speeds,” said Jeffery Barroga from Paxful’s crypto exchange.
“Hobby miners and small players, no matter how much BTC they earn; they will find that this is not enough even to pay their general expenses. ”
Most small miners are already closing. The decrease in hashrate, which represents the amount of processing power allocated to run a bitcoin blockchain, proves this. Bitcoin / dollar price more than 50% thought in mid-March reduced miners’ profitability in sync. The analyst said:
“If we look at Black Thursday, most inefficient miners are likely to escape. When the halfway approaches, I will talk more clearly about this. ”
Gold is a Better Indicator
The analyst suggested that gold, rather than popular prediction models, is a better price indicator for Bitcoin. Precious metal reacts towards global macroeconomic events and is very close to the features of Bitcoin, so it can provide more reliable tips for the cryptocurrency.
“Bitcoin should rise but still prove itself,” said the analyst.