Bear Market Benefits for Bitcoin

This sentence may seem strange at first glance; But the downturn or so-called winter of digital currencies can also be beneficial for Bitcoin. For example, some of the most important projects, such as the Lightning Network, were born in declining markets.

To Report Kevin Telegraph, The recent digital currency crisis has created a wave of panic in society. Sales of mining machines have reached their highest level in the last 7 months; Because the profit of extraction has decreased until the level of October 2020 (October 1399).

The Bitcoin Fear and Greed Index has reached its lowest level since the third quarter of 2019 (2009) before the Corona epidemic. The value of this index was in the “severe fear” area on June 15 (June 25).

Also read: Hardship called Bitcoin; How has Bitcoin survived so far?

According to some experts and managers in the digital currency industry, the situation in this industry may not look good; But this is the appearance of the matter.

The digital currency industry elite also emphasizes that declining markets are really good for bitcoins and digital currencies. This type of market eliminates speculators and fraudsters and at the same time provides a space to build real and excellent products and services.

Josef Tětek, an analyst at Trezor Bitcoin, says:

The current market situation is good for Bitcoin in the long run; Because it frees the market from leverage, scams and fraudulent institutions.

According to Tetek, previous downward markets have been a breeding ground for large projects, including the Lightning Network, which allows bitcoin to be traded quickly and cheaply. The initial idea of ​​Lightning Network was sparked in the declining market of 2015 (2015).

“In the winters of digital currencies, when skeptics and speculators leave the market, construction opportunities arise,” Tatak said, noting that the digital currency market is facing one of its most critical moments since 2018 (1397). The market has lost more than $ 1 trillion in value since the beginning of the new year.

Tatak adds in this regard:

Descending markets are good for Bitcoin. Builders are less likely to be distracted, and the founders of fake projects that only seek faster financing from venture capitalists are disappearing as quickly as they once did. The real creators will be happier when all this nonsense is gone.

Dirk Klee, CEO of Bitcoin Suisse, also says that the digital currency market needs to survive the winter of digital currencies in order to grow and mature. According to the CEO, the quality, stability and security of services and products related to digital currencies become more important in uncertain market conditions.
Kelly adds:

Ultimately, this is what the digital currency industry needs to grow further, and our goal is to raise our standards every day.

Like other large markets, bitcoin and the entire digital currency ecosystem have historically evolved over cycles. Many digital currency experts believe that bitcoin has never been traded lower than it was in the previous cycle.

According to Kraken CEO Jesse Powell, bitcoin price cycles can be calculated by halving the bitcoin mining bonus (halving). During this period, the reward for extracting bitcoin blocks is halved every four years. Historically, this has increased the demand for bitcoin and ultimately the overall trend of bitcoin cycles.

Powell is known these days for his accurate prediction of the recent winter of digital currencies, although his earlier prediction that Bitcoin would reach $ 100,000 by the end of last year did not materialize.