The Bitcoin’s recent price drop affected many. Falling to a 13-month low BTC is trading below $4000. This sudden nosedive sent ripples (no pun intended) all across the crypto-sphere.
According to the latest news, as many as 800,000 BTC mining units were disconnected from the network over the past 14 days. Some miners in China are selling their equipment “by kilo”, but if you’re hoping to get yourself a few kilos of the state-of-the-art miners, forget about it.
“Those miners being sold by the kilos are even older and obsolete models that aren’t usable anymore. So people are selling to recycle [them] like copper instead of for further mining purposes.” – Mao Shixing of F2pool.
With so many units leaving the network, the hash rate falls as well. In the two weeks between 10.11 and 24.11, the drop was almost 13%.
What is happening?
Investing in the cryptocurrency market isn’t for the faint-hearted. You need to keep cool and be ready for a mad ride at times. And paradoxically this is the bright side of the current situation. The market is maturing and many of those, who only got into crypto to get rich overnight – probably changed their minds and moved on by now.
Many people are seeing the current dip as similar to the 1990s dot-com bubble burst. After the initial craze, markets have to correct in order to begin a more stable, healthy growth. And this could mean that the crypto-sphere is finally beginning to mature.
Amara’s law is a term created by Roy Amara, a professor at Stanford University. It states that:
“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”
It seems like a suitable way to describe the current situation. Many people jumped into crypto-market to make money on the “next big thing”. But it will take time before cryptocurrency is backed by more “real value” and not only price speculation.
Let’s just hope that we’re already moving past the “overestimate” part.
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