‘It might get ugly with’ Bitcoin…BUT

Prices are a reflection of investor sentiment, they say. In a span of a little over two months, Bitcoin’s price has promptly halved, and now, after China’s recent crackdown on mining, a section of the market participants believe that BCT is a less attractive prospect. 

Talking on similar lines in a recent Kitco News interview, Saifedean Ammous, the author of ‘The Bitcoin Standard’ said that the current hiccup would not have a long-term impact on crypto’s price. He said,  

“You can’t really ban Bitcoin, you can ban yourself from Bitcoin, but Bitcoin continues to operate and I think even if it’s going to be a 50%, 60%, 70%, 80% crash, ultimately, the ability to bounce back is what’s going to win the day for Bitcoin.”

Nevertheless, he concurred that the Chinese crackdown was a serious issue because a major proportion of the mining operations have been halted. Ammous further stated that BTC’s price would most likely drop further as and when more machines go offline. Miners, indeed, are facing one of their worst nightmares at this stage. What’s more, the author also expects a panic sell by the Chinese hodlers in the coming days. 

As a matter of fact, miners are large hodlers themselves, and now, according to Ammous, “you’re forcing them to sell large quantities.” Nevertheless, at the time of writing, Glassnode’s data underlined that miners’ outflow volume had touched its lowest point in 6 months, which ultimately implies that miners are still hodling their BTC. However, the sell-off that Ammous pointed out might likely take place in the foreseeable future.

Source: Glassnode

The author further opined that the clampdown would only impact traditional assets like gold. He stated that, unlike gold, BTC’s prospects aren’t influenced by political and banking systems. After witnessing a minor 0.32% price drop in the past 24-hours, Bitcoin was trading at $34,000.69 at press time.

Additionally, it should be noted that BTC’s hash rate has been falling over the past few days. Nevertheless, Ammous was positive that it would soon recover. With respective to Bitcoin’s inevitable comeback, the author concluded, 

“It might get ugly with BTC, but it thrives on adversity. If you do try and knock it down, if you do try and hurt it, you’re just setting up a great comeback story for BTC. This has been the case for over the many years.”