Bitcoin’s stagnation is alarming and could be followed by more bearish price action
BTCs continued volatility has seen the premier digital currency accrue monthly losses of 11%
- Wisdom Tree's Bitcoin spot BTC application was finally rejected by the US SEC after months of delay.
- A paper authored by researchers from Australia's Macquire University claims that ETH is a better store of value (SOV) when compared to BTC.
- Bitcoin's market dominance index (DI) has further dropped to 39.1%.
The last 72 hours have seen Bitcoin stay rangebound between AU $79,000 - AU $83,000, leading many analysts to believe that more bearish action may be on the cards for the flagship crypto. In fact, since Dec 2, BTC's value has dipped from a relative high of AU $81,150 to around AU $79,200, with the digital asset currently trading at a price point of AU $79,500.
This ongoing slip seems to be driven by many factors, with the recent discovery of the Omnicron variant being one of them. Not only that, a little over a week ago, the U.S. Senate Banking Committee chairman revealed that the govt agency is actively going to seek out certain information from stablecoin issuers and exchanges after the President's Working Group on Financial Markets released a report suggesting that stablecoin issuers need to adhere to all of the same federal laws that banking institutions are subject to.
Another reason why Bitcoin could be underperforming in the eyes of many could be the US SEC's recent rejection of asset manager WisdomTree's spot Bitcoin exchange-traded fund (ETF). The disapproval comes after the regulatory body had already delayed its decision a number of times through the course of 2021. The SEC's decision emanates from the fact that the offering was not able to satisfy its existing listing rules — especially those where the commission would be able to ascertain certain data that would allow it to "detect, investigate, and deter fraud and market manipulation".
Ethereum a better store of value than Bitcoin?
As per a paper authored by researchers at Australia's Macquire University, Ethereum has officially become the world's "first deflationary currency" and that it is on track to becoming a much better long-term store of value (SOV) when compared to Bitcoin. According to the study, following Ethereum's recent EIP-1559 upgrade — which was a part of the larger and more comprehensive London Hardfork — more than a million ETH has been burned from the altcoin's existing circulatory pool.
The researchers claim that transaction fees (>50%) associated with each of the 12,000 odd Ethereum tokens being minted daily is now being burned, a fact which when coupled with ETHs growing demand should result in the digital asset surging past Bitcoin in popularity as an SOV.
Not everyone agrees
Challenging the assertions made by the above-stated research paper, Microstrategy CEO Michael Saylor opined that when it comes to network hash rate security, Bitcoin is infinitely more superior as well as dependable when compared with ETH — especially given the former's unchanged supply and infrequently changed protocol. On Nov 29, Saylor revealed that his firm had acquired an additional US $414 million worth of Bitcoin.
Disclosure: The author owns a range of cryptocurrencies at the time of writing