The crypto market looks better today with all the coins trading in the green.
During the past few days, the crypto market was all bloody with most coins trading in the red, but analyst Josh Rager said that there’s nothing to worry about because it was just a natural correction following the huge surge from last week.
Bitcoin could surge to $100k – what could kill this prediction?
There’s a popular crypto analyst who said that BTC would probably hit $50k – $100k by 2021, and he’s now analyzing the risk of a death spiral that could thwart his prediction.
PlanB is analyzing whether the upcoming halving, which will slash the amount of BTC that miners earn for processing transactions in half, will convince miners to switch off their rigs.
This could start a process called miner death spiral that increases BTC confirmation time and will definitely lower confidence in the network and drag down the price of BTC.
Here’s PlanB’s tweet below:
Do you think May 2020 #bitcoin halving of miner reward will cause a mining death spiral or miner capitulation?
— PlanB (@100trillionUSD) January 22, 2020
Someone asked: “If the cost of mining increases due the halving, will transactions fees increase on the network? If how could that affect the price?” and PlanB responded: “The cost of mining will not increase due to halving, the revenue of mining will decrease (revenue -50%)”
Another Twitter user asked PlanB: “What is your opinion on price before/after halving? Jason cites the capex of new mining equipment is 10x from previous generation and this may have a big impact pre-halving. Thoughts?” and he responded: “IMO bitcoin price will be less than S2F model value directly after the halving”
The risk for a miner death spiral is zero
PlanB said that the risk for something like this to happen – a miner death spiral – is effectively zero.
This is due to a built-in feature on the BTC network that automatically adjusts how much computing power is required to process transactions.
Yes, "mining death spiral" risk is effectively zero. IMO the biggest risk that investors see, "futures / manipulation", is also much less than the benefits. My next article is about futures, how it works, lot's of calculations and real btc futures data examples (probably Feb/Mar)
— PlanB (@100trillionUSD) January 23, 2020
He remains true to his prediction:
“In my opinion, co-integration between Bitcoin’s price and stock-to-flow means all network effects march lockstep: Investors, Speculators, Merchants, Consumers, Miners and Developers together… demand and supply, like clockwork!”
At the moment of writing this article, BTC is trading in the green and the coin is priced at $8,360.80.