Recently, the bitcoin “death spiral” has become a hot topic in the community.
The reason is that Atulya Sarin, a US financial expert at Santa Clara University, published a column on MarketWatch, which says bitcoin will become worthless, because it is entering a death spiral.
The so-called bitcoin death spiral means that when the price of bitcoin is lower than the cost of mining, the miner “exits” the market, and with the decrease of the cost of mining, the price of bitcoin will continue to decline, which will cause a large number of investors to sell short bitcoin in the futures market, aggravating the fall of the bitcoin. In fact, “confidence” is the most important element in the financial industry. If we look back at the past financial crisis, we will find that what is really fatal is not how much value is lost in a crisis, and how many enterprises are bankrupt, but they lose confidence in the market. This uncontrollable situation will easily bring disastrous results once a day is triggered.
It is undeniable that, as the price of bitcoin has fallen, the confidence of encrypted currency investors is being shaken, coupled with some irresponsible social media rumours of “bitcoin has died”, which makes it difficult for many to see the future trend of the entire encrypted currency market. However, although most people are still in the fog, there is always a “clear person” to be able to analyze the real industry, one of which is Anthony Morgan Creek, the founder of the famous Wall Street investment bank, Anthony Pompliano.
Anthony ponpalia believes that while bitcoin prices may be at the lowest level in recent history, the fundamentals of bitcoin are growing, and he analyzed seven key basic data points that fully show that the fundamentals of bitcoin are improving.
In fact, the basic elements of the development of the bitcoin centralization technology network have improved.
In Anthony ponpelo’s personal blog, he has collected a large number of relevant data points and summed up seven key parameters that fully demonstrate that the bitcoin fundamentals are constantly optimizing and continue to grow. On Twitter, he also appealed to people not to be confused by the price appearances:
“The fundamentals of bitcoin are being strengthened. Don’t let prices distract your attention. Bitcoin is still the best asset in the past 10 years, none of it.”
Anthony ponpnuo added:
“Price is only one of the criteria for the value of assets, and the price factor is important, but it is not the key indicator of assessing the future value of assets. Although the price of bitcoin has fallen now, the fundamentals of the bitcoin block chain seem to be getting stronger.
The seven main parameters include the number of purse users, the cost of a single transaction, the total number of transactions, the number of confirmed transactions, the daily average volume of transactions except the super active address, the rate of hash of calculation, and the number of bits of the bitcoin. In fact, if you analyze the data of each parameter, you will find that the performance of bitcoin is quite excellent.
1. Over the past two years, the number of purse users in the bitcoin block has been growing significantly.
2, since February 2018, the single transaction cost of bitcoin has been declining continuously.
3. Over the past two years, the total number of bitcoin trading has been increasing.
4, since February 2018, the number of bitcoin transactions confirmed Daily has increased.
Since 5 and 2018, the average daily trading volume of bitcoin, except for the super active address, has been steadily increasing.
6. In the linear range, the rate of bitcoin hash has been nearly two times over the past year, and the calculation of force data has also maintained a healthy trend.
7. According to Bitnodes data, the number of bitcoin nodes has increased by 98% over the past two years.
The data will not lie, the basic side of bitcoin has been effectively improving, so is the price really so important? As Anthony ponpnoo says, do not be distracted by the noise, but to focus on the fundamentals, and bitcoin does not deviate from its own direction.