Leading Crypto Heads Praise Bitcoin’s Performance While Another Refutes ‘Death Spiral’ Scenario

Bitcoin Praised And Investor Finds Failure Unlikely

Morgan Creek Founder Anthony Pompliano tweeted today about the S&P’s significant decline. The comment was meant to provide investors with perspective concerning cryptocurrency. Essentially, even though crypto experienced significant losses this year, look at the S&P – it isn’t faring well either.

Of course, twitter users commented on the post. One tweeter, former Wall Street trader John Todaro stated that it does not make sense to compare the two markets due to the differing capitalizations and that Pompliano’s tweet was misleading. Instead of comparing raw figures, Pompliano would do better to compare percentage gains and losses. Alamentarius, another commented, also stated that it is unreasonable to compare “equity value of every public company [with a] speculative project that turned into a bubble.”

Pompliano tweeted back and defended his initial post by providing information on bitcoins historical financial performance in comparison to the S&P. He then added that bitcoin is the “best performing asset” today.

Andreas Antonopoulos, author of Mastering Bitcoin, also had some words to stay about the cryptocurrency. In a YouTube post, he explained the concept of “deal spirals” and why they are unlikely in bitcoin’s case. As he explained, death spirals are generated by economic factors that affect bitcoin’s price and government issuing regulation on mining. As a result, bitcoin’s price decreases and miners are less inclined to mine, thus shutting down their mining equipment.

In turn, mining hash power declines as well. Bitcoin’s mining difficulty adjustments are calculated on ever 2,016 blocks. This means that instead of difficulty changing in two weeks, it does so in four and slows the network. Miners may then find that they are not able to make enough profit

Antonopoulos added that the death spiral is an unlikely scenario because miners view their activities over the long term, especially because the equipment has a high up-front expense. There are also miners that wonder what other miners do with their bitcoin in the current market, especially over a long period of time.

James McAvity, a commentator, stated that each miner has their own operation and the elements of the operation are determinant as to whether a miner holds or sells their bitcoins. He also added that some miners are able to create ancillary free power and others will sell their bitcoins after mining if they are struggling to survive. There are also some miners that have bitcoins that must be hedged their bitcoin with futures and options. At the end of the day, a lot of what miners do depends upon bitcoin’s value.

Get Daily Headlines

Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

What to Know More?

Join Our Telegram Group to Receive Live Updates on The Latest Blockchain & Crypto News From Your Favorite Projects

Join Our Telegram

Stay Up to Date!

Join us on Twitter to Get The Latest Trading Signals, Blockchain News, and Daily Communication with Crypto Users!

Join Our Twitter

Add comment

E-mail is already registered on the site. Please use the Login form or enter another.

You entered an incorrect username or password

Sorry, you must be logged in to post a comment.
Bitcoin Exchange Guide