About the latest episode of Cointelegraph market talksHost Ray Salmond interviews Dan Rosen, Associate Director of Derivatives at Luxor, a US-based Bitcoin (BTC) mining pool, research centers and service providers.
The show covered many broad topics, including Rosen’s views on how the upcoming Bitcoin halving will affect the price of Bitcoin, why Bitcoin’s volatility will remain in the double digits for years to come, and how miners can hedge their ability to operate. Computing power derivatives.
According to Rosen:
“Any mature asset experiences high volatility when it first launches, and if you compare Bitcoin to tech stocks like Apple and Google in the early 90s, their volatility was astronomical. Four years ago, Bitcoin Volatility also reached 70% to 100% (range). Over time, this number is declining, but as assets become more investment and ETF (exchange traded funds) are finally launched, we We will continue to see that trend. One day, we may see annualized growth of 20% or less in the asset class within four to five years.”
Historically, miners have had few options for hedging risk in their operations other than staking the bitcoin rewards mined. Luxor’s hashrate derivatives essentially add infrastructure to this segment of the industry, allowing miners to hedge against changes in hashrate prices. These derivatives give miners the option to forecast and lock in future revenue during unexpected volatility events that affect their operational efficiency.
related: Bitcoin Difficulty Jumps 6% to New High as Miners Ignore Bitcoin Price Drop
Macroeconomics Continue to Affect Bitcoin’s Price and Miners
Regarding the macro economy and how this will affect the price of Bitcoin and its miners, Rosen said, “The market is starting to realize that we may not be hitting the 2% inflation target rate any time soon, and it does appear that the market is starting to expect that inflation will continue in the long run.” Hovering in the 2.5% to 3% range. At the same time, we still view the dollar as a safe-haven asset, which is affecting the stock market, while creating macro headwinds, causing dollar-denominated assets to depreciate.”
Despite the bleak economic outlook, Rosen believes:
“While bitcoin prices may not hit six figures pre-halving or post-halving, I wouldn’t be surprised if a new low is made within the next six months due to macro headwinds, followed by a stronger rally later .”
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