Despite ‘Crypto Winter’, Bitcoin Fundamentals Continue To Boom
The value of Bitcoin (BTC) has fallen drastically since late-2017’s high at $20,000, but it is widely believed that industry fundamentals remain decidedly bullish. In fact, some even have said that there is a dramatic disconnect between fundamental developments and the value of the cryptocurrency.
Dan Held, a former product manager at the San Francisco-headquartered Blockchain.com, recently remarked that while BTC is in a bear market, he’s personally more bullish than ever before. Here are the reasons why Held holds such sentiment.
While we're in a #Bitcoin bear market, I'm more bullish than I've ever been:
– $1B moved DAILY on the Bitcoin network
– Huge Lightning Network growth
– Schnorr, MAST, Taproot
– Bakkt and Fidelity about to launch
– Government debt at all time highs
— Dan Hedl (@danheld) February 16, 2019
Bitcoin is Still Being Used
Although it may be logical to assume that as BTC fell, so did usage statistics of the network. This has been far from the case. In fact, according to statistics from Blockchain.com and other block explorers, there’s over $1 billion of value moved each and every day on Bitcoin, deemed the most secure transaction settlement layer by Anthony Pompliano.
This has only been underscored by the recent growth in daily transaction count. Per notable industry personality Armin Van Bitcoin, the number of daily transactions on the network is nearing its all-time highs, which were established at the peak of the previous bull rally.
Let’s add these too 🙂👇
– Hashrate approaching ATH
– Transactions per day approaching ATH pic.twitter.com/Ils43ISeky
— A v B ⚡ (@ArminVanBitcoin) February 17, 2019
Lightning Network Flexes Its Muscles
To many industry onlookers, the Lightning Network may seem nebulous. It’s an off-chain/second layer scaling solution that can facilitate secure, effectively free, and near-instant transactions, much unlike on-chain transactions, which can be expensive and slow.
But, in spite of skepticism and low expectations, the Lightning Network has boomed. The network based on Bitcoin recently surpassed a capacity of 700 BTC, ~$2.5 million, as applications built with the scaling protocol, like the now-popular Lightning Pizza, have launched. While this is great in and of itself, Jack Dorsey, the chief executive of both Twitter and Square, recently lauded the protocol, even explaining that he intends to add Lightning to his startup’s offerings.
Along with Lightning, Held also drew attention to other developments in Bitcoin, like Schnorr Signatures, merkelized abstract syntax trees (MAST), and Taproot, which will allow for improved scalability, fungibility, and programmability.
Government Debt Reaches All-Time Highs
Since Bitcoin came into being, the cryptocurrency has always been centered around anti-establishment values. Held, a long-time industry insider is a subscriber to this thought process. Thus, in his recent comment, he noted that the fact that government debts are establishing all-time highs day-over-day should be a positive catalyst for Bitcoin.
For some context, MarketWatch recently reported that U.S. public debt surpassed $22 trillion. In response to this swelling statistic, the Peterson Foundation, an American financial services group that is focused on amending the nation’s economic issues, claimed that the fiscal situation is “not only unsustainable but accelerating.”
While this isn’t an explicitly bullish catalyst for decentralized, digital money, some pundits have argued that Bitcoin provides an easy-to-use way out.
Travis Kling, the chief investment officer of Ikigai, recently stated that Bitcoin is a perfect hedge against “fiscal and monetary policy irresponsibility.” He stated that the monumental rise of employed quantitative easing (QE) strategies, along with the growth of debt, is “how you would write the script” for the adoption of cryptocurrencies, especially ones that aren’t tied to the legacy world.
Not The Only Bull On The Block
Held’s recent quip comes after Fundstrat Global Advisors, a New York-based investment advisory outfit/unit, released its 2019 crypto outlook. According to Tom Lee, a markets optimist and the co-founder of Fundstrat, there are upwards of eight positive convergences for this asset class in 2019.
Much like Held’s comment, Fundstrat’s report cited the Lightning Network, impending institutional involvement, a weakening macroeconomy, among other factors to back its cryptocurrency optimism.
Photo by André François McKenzie on Unsplash