As a seasoned analyst with over two decades of experience in the financial markets, I have seen countless narratives come and go. However, the “Store of Value” narrative for Bitcoin (BTC) might be one that’s on its last legs. While BTC has undeniably been a revolutionary force, its inherent flaws such as constant selling pressure from miners and conflicts of interest in the proof-of-work ecosystem make it more of a liability than an asset in today’s rapidly evolving crypto landscape.
According to a well-known advocate for Ethereum, Adriano Feria, the notion that Bitcoin serves as a “Store of Value” could be facing its end due to potential conflicts in the proof-of-work system, continuous selling pressure, and the exposed vulnerabilities of miners. At the same time, the exchange rate between ETH and BTC has reached its lowest point since April 2021’s early stages.
Bitcoin (BTC) flawed by selling pressure and conflicts of interest: Opinion
Adriano Feria, a DeFi researcher and long-time Ethereum (ETH) advocate, stated that Ethereum’s (ETH) censorship-resistance was demonstrated, as the Office of Foreign Assets Control (OFAC) struggled to effectively enforce censorship on its transactions. In simpler terms, this means that Ethereum transactions could not be effectively blocked or censored by OFAC.
In simpler terms, Ethereum’s proof-of-stake system is inherently resistant to censorship. This point is beyond dispute; it’s a verifiable reality. The Office of Foreign Assets Control (OFAC) has indeed attempted to censor transactions, but their efforts have fallen flat. Case closed.
— AdrianoFeria.eth 🦇🔊 🛡️ (@AdrianoFeria) October 25, 2024
In the meantime, according to automated monitors for Miner Extractable Value (MEV) impacts and Office of Foreign Assets Control (OFAC) sanctions in Ethereum, more than half (58%) of blocks mined after the Merge followed OFAC guidelines by excluding transactions linked to designated Ethereum (ETH) addresses.
Simultaneously, it’s important to note that Bitcoin (BTC), the leading cryptocurrency, is encountering increasingly tough hurdles, according to Feria. As an asset, BTC is consistently subjected to selling pressure from miners who aim to offset their operational costs. Furthermore, the advanced mining equipment used in this sector isn’t easily transferable, which contributes to an overall resource-inefficient ecosystem.
Moreover, the process of mining Bitcoins (BTC) faces challenges when price growth decelerates, and the enthusiasm generated by halving events no longer draws in enough fresh investors.
Contrarily, after the Merge, Ethereum (ETH) maintains a net deflationary state and continues to provide a steady return for long-term holders of Ether.
Despite pale ETH dynamics, giants still betting big on Ethereum (ETH)
Furthermore, Layer-2 scaling solutions such as different types of rollups are enhancing the capabilities of the Ethereum (ETH) network, whereas Bitcoin’s Lightning Network is still considered uncommon by most Bitcoin users.
This means that companies such as Sony, Samsung, Coinbase, and Kraken – who are significant players in both traditional technology and the cryptocurrency sector – are examining the use of rollup and appchain solutions within Ethereum’s Layer 2 (L2) network.
It should be noted that Ethereum’s (ETH) price performance in this cycle causes strong pessimism among investors.
According to data from TradingView, the value of Ethereum relative to Bitcoin (ETH/BTC rate) has fallen to 0.03628, marking a low not seen in over three and a half years, with the last occurrence being during the first week of April 2021.
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2024-10-26 17:05