FlibFlib Analyst: Bitcoin Price Needs To Reach $7,000 If It Wants To Save The Mining Industry

Analyst Says Bitcoin Needs To Reach $7,000 If It Wants To Save The Mining Industry

Bitcoin (BTC) has been affected by a bear market that started back in December 2017. The digital currency lost more than 80% of its value and other digital assets followed the trend and fell even further. There are several projects and economic sectors in the crypto market that have been affected by this bear trend.

Mining activities have been hit by this situation as well. As mining difficulty increased throughout 2018 and new miners entered the market, mining virtual currencies were something very difficult to do. As Bitcoin prices fell since August 2018, mining activities became unprofitable.

Flib Flib, a recognized cryptocurrency analyst and researcher, released a Twitter thread in which he explains how the mining industry is being affected by this bear market and what it needs to start growing again.

He started the thread explaining that mining fees are 1% of the total mining income. At the same time, Bitcoin’s revenue is 99% of the total mining income.

He mentioned that Bitcoin should grow up to $7,000 by May 2020 if Bitcoin wants to avoid further risks. In 2020, Bitcoin will experience a new halving and the rewards received by the miners will decrease from 12.5 BTC per block down to 6.25 BTC.

If Bitcoin does not appreciate, mining fees would need to increase by 46 times to maintain mining revenue. However, there are some other issues that must be solved. In the coming years, the Lightning Network (LN) will be reducing the number of transactions processed on-chain, something that will be harming miners and the fees they receive per transaction.

There are some individuals and experts that believe that Bitcoin will continue to grow in the future. For example, Moon Overlord believes that Bitcoin could start to grow before the halving that will take place in May 2020.

Matt Luongo, the founder of Fold, explained that the deflationary model of Bitcoin could get unsustainable over time. He said this during a conversation at the mysterious Satoshi’s Roundtable.

As more second layers will spread in the future, the Bitcoin economy will be creating an environment where the underlying blockchain is susceptible to block reorganizations. At the time of writing this article, Bitcoin has a hash rate of 47 million TH/s, according to data provided by Blockchain.com. Each BTC coin can be purchased for $3,649 and it has a market capitalization of $63.99 billion.

Bitcoin (BTC), Ethereum (ETH), XRP (Ripple), and BCH Price Analysis Watch (Feb 11th)

Publication date: 
02/11/2019 - 23:17
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