5 Pillars on which Bitcoin relies for takeoff

5 Pillars on which Bitcoin relies for takeoff

Bitcoin seeks to recover, and although at the moment it does not find a takeoff point, there are several analysts who believe that an upward cycle is coming.

The Bitcoin seeks to recover, and although it does not find a point of takeoff, several analysts who believe that an upward cycle ahead. Their forecasts are based on five pillars.

The Chinese outpost

China’s decision to declare war on cryptocurrencies caused a strong shock to the crypto world. However, after the storm it can bring benefits.

It is that according to various personalities and analysts, a massive exit of miners from China could benefit Bitcoin with greater decentralization of computing power. In fact, this is already happening with an exodus from other regions.

Among the benefits of this hypothetical scenario is the fact that the network would not be at the mercy of weather seasons or energy rationing in Chinese territory and, consequently, there would be a greater stability of the processing power accumulated in the network.

Bitcoin and dollar

Dollar devaluation

The US monetary policy in recent times has triggered a sustained depreciation of the dollar, the world’s main reserve currency.

This has made many investors have opted for other safeguard alternatives, including cryptocurrencies.

Large companies and gurus have reported in recent days that they turned part of their income to Bitcoin as an investment and safeguard mechanism.

A greener bitcoin

The decision of Elon Musk’s Tesla company not to accept Bitcoin as a means of payment due to its high environmental impact was another cause that led the main cryptocurrency to suffer historical losses.

But the coup renewed the debate over the electricity consumption of mining, leading to acceleration of advances to use clean energy for the crypto industry.

In that direction, Musk himself and Michael Saylor, CEO of MicroStrategy, one of the pillars of institutional investment in bitcoin in recent times, have pointed. At the beginning of the week, it was announced that the two entrepreneurs held a meeting with the main miners in North America and formed the Bitcoin Mining Council.

The organization, broadly speaking, proposes the standardization of energy consumption reports in mining and the promotion of the use of renewable energies to mine bitcoins, both in the region and in the rest of the world.

In the same vein, the request for a bitcoin ETF (exchange-traded fund) arose that does not follow its price in the market but rather an ecological BTC index: the Carbon Neutral Bitcoin Index, created by One River.

The application filed with the United States Securities and Exchange Commission (SEC) has the advice of the former president of the institution, Jay Clayton. The former official went from rejecting various Bitcoin ETFs to supporting one following his departure from the SEC.

Official support for Bitcoin

Institutions and officials of the US government are increasingly taking favorable positions with respect to bitcoin. The chairman of the Federal Reserve of the state of St. Louis, James Bullard, recently assured that all cryptocurrencies are useless, with bitcoin as the only exception.

For his part, former Treasury Secretary Lawrence Summers considered that bitcoin could be essential for Internet commerce. Despite the increasingly favorable positions in government instances, Congressman Jim Hines assured this week that there was a strong lack of knowledge about bitcoin among legislators. Therefore, he added, a regulation for Bitcoin will not come soon in the United States.

Bitcoin as an investment

It’s no secret that heavy investor interest in bitcoin has grown considerably in recent months, in the wake of the bull cycle and the breaking of the all-time high dating back to 2017.

This week, a site reported that hedge fund manager Ray Dalio admitted to owning bitcoins for the first time. Although he did not disclose figures, Dalio said he prefers bitcoin as an investment instead of bonds, which ends up confirming his favorable position with respect to the cryptocurrency, after having remained skeptical.

The position in favor of bitcoin has also permeated the world’s large financial institutions, such as Goldman Sachs. Matthew McDermott, Global Head of Digital Assets at the US bank, refers to BTC as an investment asset.

The bank has been increasing its exposure to the world of bitcoin and cryptocurrencies more and more and this week announced a new step in that direction, offering its clients the purchase of shares of the Coinbase exchange, which went public a little more than one month.