The beginning of the year saw BTC hovering around the US$7700 mark and at such times, the addresses of Bitcoin miners stood at 684,000 but back in the past, a significant rise of 981, 000 Bitcoin addresses certainly at the same time when prices were US$9500 specifies that BTC adoption betters when prices rise. That’s what happened on December 23, 2018, when BTC was trading at US$14,800, a time when the market was super bullish for BTC. At such times, the incentives related to mining significantly multiplied manifolds encouraging investments in BTC and retention. A good sign nevertheless for the miners since one mining activity roughly costs miners US$3,000 as we write this.
Considering the present price of BTC at US$10,000, there is a significant US$7,000 in profits for mining activities. Besides, it is not necessarily as simple as making paper boats since mining demands significant hardware maintenance and they come at a cost. On top of that, you do not necessarily mine one BTC in a single day, few have to wait for months to get one single BTC for their efforts. If they are mining in places where power-cost are significant, pool fees are high, labor cost considerably, you could roughly make not even 0.1 BTC as profits since BTC mining could take sometimes more than a month. In this way, retaining the BTCs for a better bull run where the market goes beyond US$10,000 will likely make more sense to investors looking for considerable profits.
Growing Adoption Model To Evolve above US$10,000
The narrative of Warren Buffet makes sense when he said: “ Be Fearful when Others are Greedy and Greedy When Others Are Fearful”. The DeFi boom has certainly given a fresh push to Ethereum, but BTC has shown significant stability in the last 5 years by maintaining a US$10,000 stable price on an average run evoking trust further. It is well over the threshold limit of US$7500, considered a border-line investment for sustainability for miners, making more people mine Bitcoin and participate in the block validation activities. Especially during the prevailing CoronaVirus times when job opportunities are rare to find and BTC mining paves the way for better returns, the pandemic has emerged as a blessing in disguise for the cryptocurrency market.
At present, miners are not likely to sell off their BTC since they anticipate that the halving effect will further push the prices, incentivizing them in the process. They are also hugely counting on the trade-war with US-China that has significantly impacted other investment portfolios, making BTC even outsmarting the yellow metal i.e. gold. Such developments likely summarize that BTC will hold considerable value after the Chinese government planning to launch their Central Bank Digital Currencies (CBDCs) or digital Yuan and Japan already acknowledging BTC as a legal tender and setting up vending machines where you can easily buy BTC in India with credit or debit card or even fiat money.
17 Million BTC Mined, Halvening Could Push Retention Rather Investment
In the market, often sentiments govern how asset-trading by other investors pushes the demand. Since we are looking at a larger schema and BTC price expectations are likely to hit a US1,00,000 dollar mark by the time the next halving or halving effect sets in for the 2024 quarter, there is greater scope for improved price variance and optimism in the theory of holding the asset. BTC is largely driven by investor sentiments when hacks and bugs in the system completely take-away the trust, the fall is imminent. But improved security standards and minimum hacks pertaining to BTC have pushed sentiments ahead, establishing a bull run recently. As a result of enhanced expectations of growth after the halving, the demand for BTC is on the rise and it still holds as the highest crypto by volume as per market capitalization. The investor market has been highly speculative of BTC and they are buying it as a safe-haven similar to gold, often termed as Bitcoin gold.
With a maximum of 21 million cap, 17 million already mined and up in the market, a US$10,000 mark is a trigger point for investment in BTC as we likely see more adoption and scarcity of BTC after each halving will make the investment process advantageous. It is highly unlikely however that miners will be selling the BTC at a loss when prices fall below US$10,000 since the mining costs are expected to double by the next halving event that is most likely to happen in 2024. As the investors anticipate that US$100,000 could mean more and more people retaining BTC or rather buying more of BTC and that’s what is happening at the moment as the daily net growth of BTC is consistently rising, the bullish run is most likely to continue till the end of 2021. Juxtaposing the same, where just 21 days in the past had shown a negative outlook where people started giving away BTC, we likely see positive trends ahead. The only determinant that could likely shun off the retention rate will be stricter regulations or big hacks that could likely take away the bullish run, but lately, that has been significantly mitigated as the network has turned much more robust and reliable for long term investment goals.
Disclaimer:
The views expressed are personal and should be taken as an investment guideline. It is always best to consult experts like PCEX Member when you wish to trade in cryptocurrencies, especially buying BTC with debit or credit card. They are real experts to help you understand the market dynamics and take the right financial course for maximum benefits.
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