Bitcoin is in a deadly spiral and will die fast
Unfortunately for Bitcoin investors, there is nothing good to report about the most popular cryptocurrency. Where many people expected a big increase at this point in the year, the value of the coin is around $ 3,300 at the moment with a 10% drop for the past 24 hours. If you consider how high the value was at the end of last year and even at some moments this year, the current situation is downright sad. And you feel bad when you hear what Santa Clara University Professor of Finance Atulya Sarin has to say about the crypto. According to the man, Bitcoin is in a deadly spiral and the coin is about to become worthless.
The professor gives his unseen opinion about the cryptocurrency in an article published in MarketWatch. In it he explains that there is currently no motivation for bitcoin mining, because the costs are higher than the costs of selling the coin on the futures market. And unlike gold, which can keep its value despite the fact that it is no longer being mined, Bitcoin would not be able to have any value if there are no more mining activities to keep the ledger. Without mines, according to Sarin, Bitcoin would only be a set of encrypted numbers with no value.
Now it is true that several mining projects have been discontinued lately, but on the other hand, the complexity of mining Bitcoin is dynamically adjusted to maintain a consistent issuance speed during fluctuating hashrates and we’ve already seen difficulty drops recently. As a result, in theory the hashrate would have to rebalance with the value of the cryptocurrency at a given moment.
Bitcoin investors driven by greed
Sarin continues with his comparison between bitcoin and gold. He indicates that gold is universally accepted as something to link to a certain value, but Bitcoin would be a digital commodity of which the same can not be said. There would be a fundamental difference between the investors of both resources. The original gold miners and buyers would be true believers in the revolution that could bring gold and were willing to make the necessary investments. However, the more recent investors and miners working with Bitcoin would be driven by greed. Sarin further predicts that the crypto market will not die slowly, but that it will be fast and abrupt.
That does not sound so good and if we are to believe Sarin, it has been a big mistake to invest in Bitcoin. On the other hand, the founder and CEO of Overstock, Patrick Byrne, has great confidence in cryptocurrencies and especially in the blockchain. According to him, the blockchain revolution would be bigger even than the internet.