Bitcoin miners may induce another massive bull run in the near future if certain factors go their way. If you consider the fact that as the Bitcoin price rises, mining becomes more profitable, it is easy to see why this could occur.
According to CoinDesk, once Bitcoin was able to sustain a price of around $5000 for a significant period of time, mining became somewhat profitable once again. The keyword here, however, is somewhat. The price of miners has nearly doubled recently and because of this, the increase in profitability isn’t perfect. Getting involved in Bitcoin and therefore, Bitcoin mining is still a highly volatile venture. Even if the price continues to rise, other factors can always stall it or cause a significant bear market.
If you’re unfamiliar with what these are, take a look at measures like the Crypto Fear & Greed Index, which looks into how much Bitcoin’s price movements are related to emotional factors. At the same time, consider that what is commonly called “FUD” is still ever-present in the space. People tend not to read too far beyond headlines before reacting to what they think is definite news about certain currencies.
Some, like Anthony Pompliano, have chalked this phenomenon up to the fact that the crypto market is so complex, that it is almost impossible for the average person to be a truly informed participant in it. In other words, to analyze the market effectively, as Pompliano puts it, one needs to understand a diverse range of fields, all at once.
Though having a wide of range of industry news sources can help to lower this barrier, in crypto, it is often nearly impossible to tell what’s fact and what’s fiction. Even the most reputable industry publications often cite “insider sources” or “someone close to the team” as the basis for everything that they claim to be true on a certain subject.
Until we have more transparency in the space, just about any piece of news that comes from industry sources could cause a shift in Bitcoin and really any cryptoasset’s price. This is why projects like Messari’s industry database have never been more important. Until most industry players come on board with such an effort or something similar, bull and bear markets will continue to be nearly impossible to predict. Mining will play a major part in both, but it won’t be the only spark in either case.
By: BGN Editorial Staff