Except for the activity of ecological development, almost all other data of Bitcoin have experienced a sharp decline.
Written by Sami Kassab, Kunal Goel, Messari Fellows
Compilation: Babywhale, Foresight News
Bitcoin largely lost its inflation-hedging versus store-of-value narrative in the third quarter after falling 72% from its all-time high;
As the demand for block space fell, Bitcoin transaction volume and transaction fees fell by 3% and 23%, respectively, and the average daily settlement value fell by 44% month-on-month;
Miners are in a dire situation due to sharp rises in energy prices, all-time highs in hashrate, falling bitcoin prices, and lower transaction fees;
The White House Office of Science and Technology Policy (OSTP) expressed concern that PoW hinders U.S. efforts to combat climate change and that energy-intensive mining could negatively impact grid stability and prices;
In addition to PoW concerns, the OSTP report also highlights how bitcoin mining can help reduce greenhouse gas emissions and help accelerate the transition to renewable energy grids.
Bitcoin market performance
The recent market crash was both a narrative breakdown and a test of real properties for Bitcoin.
Hedge against inflation : Due to its fixed supply and “monetary policy”, Bitcoin should be used as a hedge against inflation. The reality, however, is that even as the U.S. CPI hit a multi-decade high, Bitcoin hit a low for the cycle.
Store of value : Bitcoin has fallen 72% in a safe-haven macro environment since hitting an all-time high of $69,000 in November 2021. Bitcoin’s price movement is not a store of value, but rather similar to the movement of U.S. tech stocks. Bitcoin prices have also been hit hard as the Federal Reserve shifts to a more conservative, less liquid and higher interest rate policy.
Standout in a Bear Market: Bitcoin lost its dominance in the throes of this bear market, due to Ethereum’s more prominent price performance as it moved towards PoS.