The bitcoin price plunged to the $19,300 level on the morning of the 1st. Major altcoins such as Ethereum and Ripple are in a similar mood. Following the Terra-Luna shock, the Fed’s third consecutive giant step, as well as strong downward pressure on inflation, is on the rise.
The short-term rally seemed to be successful in the early morning of the 1st, but that momentum did not last long.
In the midst of this, criticism of Bitcoin’s proof-of-work method and, furthermore, environmental pollution is raising its head once more. In fact, Professor Benjamin Jones’s team at the University of New Mexico in the US pointed out in a scientific journal that the environmental pollution damage caused by bitcoin mining is comparable to that of the oil refining industry.
You need electricity to mine bitcoin. This process costs a lot of money, which means that it can be a serious weakness for Bitcoin given the rising global energy prices.
Because Bitcoin is a mining method, it requires a large amount of electricity, and international energy prices are skyrocketing in the followingmath of the current Ukraine war. In the end, it is also said that altcoins such as Ethereum, which consume less electrical energy, rather than the mining method of Bitcoin, are suitable for the new era. One of the main reasons Elon Musk once tried to make a Bitcoin payment to Tesla, but withdrew it was the environmental pollution caused by the electricity used to mine Bitcoin.
Some similar criticisms have been made along the lines of this. In fact, British journalist Martin Lewis recently appeared on the radio and said, “Bitcoin needs a lot of energy.
Kyle Macdonald also recently argued with CoinDesk that Ethereum, which has switched to proof-of-stake, has greater environmental protection value compared to Bitcoin. “If proof-of-stake is switched to Ethereum merge, investors will realize they don’t need proof-of-work,” he said.
On the other hand, there are still risks to Bitcoin itself.
As Bitcoin began to fall, Merge Ethereum and various other altcoins all turned to the downside. Following the Terra-Luna crisis, the price of Bitcoin did not fall below $18,000 despite the Fed’s interest rate hike. In such a situation, a low-priced buying trend came into the virtual asset market such as Bitcoin, and the overall market rallied, but the pattern of shortening the period is repeating.
The domestic virtual asset market is also depressed. As a result of a fact-finding survey conducted by the Korea Financial Intelligence Agency in the first half of 2022 on 35 operators to understand the current status of the domestic virtual asset market, the average daily transaction volume of traders was only 5.3 trillion won, halved from 11.3 trillion won in the previous year. .
Bitfinex said that there are more hoddlers (long-term investors) with 0.1 or more bitcoins in the market, and they are paying attention to the periodic fluctuations in the virtual asset market such as bitcoin, but it means that we still need to watch the situation further. to be. Jeffrey Gundlack, CEO of Doubleline Capital, has reached the point of advising people to distance themselves from investing in Bitcoin for the time being. While the founder of HS Dent Publishing claimed that the price of Bitcoin would push up to $7,000, Scott Minerd, chief investment officer of global asset management firm Guggenheim Partners, is still claiming a $8,000 drop.
However, some argue that the future of virtual asset markets such as Bitcoin is still bright, except for inflation risks. First of all, there are hopeful prospects centered on Bitcoin advocates, including Michael Saylor, former CEO of MicroStrategy.
CFTC Chairman Rostin Benham also drew attention when he said at a conference that Bitcoin’s outlook would “double up if it is properly controlled.” A prerequisite is that it should be subject to regulation by the Commodity Futures Trading Commission (CFTC) and not by the Securities and Exchange Commission (SEC), but there are clearly those who positively evaluate the atmosphere of the virtual asset market, such as Bitcoin, by his own words.
Send articles on social media
