- Bitcoin volatility still apparent but currently trades above USD 6,000 on weekend action
- Genesis Mining believes that Bitcoin will shine out as the obvious winner should a global financial and economic crisis get worse
- Blockchain-based virtual real estate is gaining traction
Bitcoin took a wild swing to get at USD 7,000 yesterday and it seems that the attempt only caused a selloff to trigger, as Bitcoin fell as low as USD 5,680 (CoinDesk) briefly earlier today on Saturday trading before recovering to levels above USD 6,000 right now.
But Bitcoiners everywhere should take heart in the current situation, where the cyclical global crisis in terms of finance and economy seems to now be taking hold. Even with all the dark whispers, Bitcoin is holding strong and still proving to be a useful hedge against the loss of value.
According to Philip Salter, head of operations at the crypto mining firm, Bitcoin’s value as a bank hedge will grow even stronger if the global economy simply goes into meltdown.
Right now, hash rate is going down alongside price drop, with halving event that many are waiting for just two months away, but Salter says this is simply because miners, like traders, also have margin calls for their operations.
He told Cointelegraph:
“It’s no different from traditional markets, you have to sell everything to keep the operations going, to pay off your debts. As a miner you have bills to pay, you have to pay for electricity, for operations; and your expenses are in dollars, so as the price of bitcoin is dropping, it means you have to sell more of your inventory just to keep going.”
He does say that the domino effect is true even in the Bitcoin mining industry, but only up to a certain point. Once price starts to decline, miners are going to be selling more of their equipment, and as they sell more, the surplus in supply puts further pressure on price. But there will be one point for any miner where it will only make sense to completely shut down their operations and halt production until prices see a recovery.
We’ve covered a lot of people pointing to Bitcoin as “Gold 2.0” but with Bitcoin more or less declining alongside global markets in traditional assets, people are wondering if this narrative is true. Salter insists it is, just that we need to see worse events unfold to see this happen:
“If this economic crisis is contained, then it will not have major implications for Bitcoin. However, if there is a real collapse, then the interest in Bitcoin will explode. It will go back to being seen as a hedge against the banking system. The more skepticism people will have in the old economy, the more they will flock to Bitcoin.”
For now, what appears to be really hot is virtual property based on blockchain.
When news broke that users on the Decentraland virtual world platform have collectively spent USD 1 million on digital land, where patches of land in a 3D virtual universe are sold, with each token assigned 10 square meters, it became apparent that this is the new blockchain asset in demand.
A senior research analyst for International Data Corporation’s European Insights and Analysis, Radoslav Dragov, said that blockchain itself was a digital asset and the use of tokens on them as virtual real estate investment made sense for people who otherwise couldn’t be there physically:
“Using blockchain to create digital representation of a real tradable asset can provide greater accessibility to assets that cannot be easily exchanged or require a high minimum investment. For example, tokenization of illiquid assets such as real estate gives many people the opportunity to invest small sums of money in a particular piece of land and then sell the tokens on the secondary market. This process of asset tokenization is democratizing investments.”
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