Bitcoin, Taproot and Global Trends

Bitcoin, Taproot and Global Trends

According to Coinmarketrate, on November 16, there was a rollback of the BTC price. This led to the loss of 10% of the capitalization of the asset. For some, this is a disaster, for others it is a common phenomenon of the leading crypto asset. There is no constant growth. It leads to a huge overbought asset.

On the eve of the rollback, the Bitcoin blockchain has updated the Taproot network, and many are interested in how it will affect the asset. And how the situation in the global economy will affect the Cue Ball.

Let’s start with the hectic real world.

 The hustle and bustle of the real world

What can be said for sure about him is that the amount of money in circulation continues to increase at a dizzying speed.

The Biden administration has just received a $1 trillion check from Congress to fund national infrastructure. All this money increases the demand for energy and raw materials, which, in turn, will worsen inflation, which now stands at 6.2% per year. And these are the official figures.

This means that those who lent money to the US government a year ago (at a rate of 0.90%) lost 5.3%. In other words, at this rate, prices will double in 6 years. And this is knowing that housing prices (which are not included in the calculation of inflation) have already increased by 25% compared to last year.

You should know that over the past two years, the United States has had to create $17 in debt to ensure real growth of $1. All this debt increases the amount of money in circulation, and can already cause inflation in only one context of energy constraints.

The same is true in Europe where inflation has reached 4.2%. But, as in the United States, what does it matter, since the ECB is no longer aiming for inflation “strictly below 2%”, but for “2% in the long term”. And the most interesting thing is, never clarifying your definition of a long-term perspective (5 years, 10 years. Or maybe 20 or 50).

Christine Lagarde even said this week that raising interest rates would do much more harm than good. It’s a way of saying (without saying it) that the ECB will soon be printing additional trillions to keep rates low:

“If we take measures to tighten monetary policy now, it will do more harm than good. In the face of rising inflation, the mere suggestion that we could tighten monetary policy in the short term would damage the economy.”

Equally, the ECB’s latest Kafkaesque economic forecasts predict that inflation will not exceed 4.2% and that we will return below 2% by the end of next year.

“Evergrande” is a good definition of the word ponzi

In China, Evergrande can no longer repay its debt on time. The second largest developer in China wants the government to relax lending rules in order to continue the ponzi scheme, as creating money from interest-bearing debt requires more and more borrowing, without stopping.

DMSA, the German market control agency, has already recognized the default of Evergrande and showed in a study that the bankruptcy of “the most indebted company in the world (about $ 300 billion) may eventually lead to a Great Reset, that is, to the final collapse of the global financial system.

Billionaire Hui Ka Yang, president of Evergrande, has mortgaged his luxury real estate in Hong Kong, sold his private jets and works of art. In a word, all that is acquired by backbreaking work. And then what?  The next deadline is December 28 with the payment of 255 million dollars.

Keep a close eye on Evergrande, whose “restructuring” (bankruptcy) will make Bitcoin a godsend for many Chinese (and not only) investors and a haven.

Taproot and S19XP

Bitcoin analyst PlanB believes that in December, the crypto asset will reach $135,000. He is not the only one who shares this optimism: a miner from the USA Marathon has just borrowed $500 million to buy BTC and mining machines.

Last week, Marathon visited Dubai to get acquainted with the latest Bitmain miner: S19XP and its 5nm chips. These machines will be able to produce 140 TH/s (27% more than the previous model), with slightly less power consumption. This machine generates about $50 a day.

Lately it’s good to be a miner. The hash price (the revenue generated by Exahash) continues to grow so much that mining is four times more profitable today than last year. We are not far from a three-year high.

Hashprice vs Bitcoin price. Blue Curve: Hashprice price / Gray curve: the price of BTC.

New Bitcoin Lightning Network Record As Adoption Grows

The Bitcoin Lightning network has now broken all records. With the recent bull rally and the decision-making that took place during the year, the need for the Lightning network has grown. This has led to a significant growth of the network. Liquidity in the Lightning network has reached several records this year, and this is just another addition to this list.

Facilitating fast, efficient and cheap transactions has been the driving force behind the success of the network. The record levels achieved this year show that adoption is growing and represents a crucial turning point for digital access in the future.

The recently achieved record level for the Bitcoin network shows how much it has grown since its inception. It also shows that the network is becoming increasingly important because of the amount of liquidity that is now in it. With a record 3,225 XNUMX BTC currently online, this is more or less proof of acceptance in recent months.

One of these major factors was the adoption of Bitcoin as legal tender in El Salvador. The country uses the Bitcoin Lightning network to process transactions made in BTC, and thus has added huge liquidity to the network. The diagram shows how much growth the network has experienced since the official adoption of Bitcoin in the country, and this is just one country.

Diagram Showing the Introduction of Lightning Networks After Bitcoin Adoption in El Salvador

The Lightning network is increasing after the introduction in El Salvador. Source: Arcane Research

The Lightning network is expected to grow even more in the coming months. This is due to an increase in the number of service providers deciding to use the Lightning network to process transactions. While it looks like this could be a turning point, these newcomers will push him to new heights.

Factors contributing to adoption

The popularity of the Bitcoin network has recently been due to a number of factors. The most notable of these was again El Salvador, with the adoption of a digital asset as legal tender in the country. But others, such as Twitter and Bitcoin Suisse, are also paying attention to the network.

Twitter recently announced that they are launching a tip feature called “Tip Jar”, which will allow subscribers to tip their favorite content creators with cryptocurrency right in the app. This feature used the flash network to make Bitcoin transactions fast and cheap, and brought more attention to the network.

In addition, Bitcoin Suisse, the largest Swiss crypto broker, is promoting the introduction of the Lightning network in its latest announcement. Bitcoin Suisse has announced that it will make Flash network technology available for use in its cryptocurrency payment system.

Well, and about the upgrade

It’s impossible not to talk about Taproot this week. This is the latest Bitcoin update. The previous one was proposed by Gregory Maxwell 3 years ago.

A new feature called “key aggregation” will help prevent the BTC blockchain from being overloaded when the Lightning Network channels are closed.

It is also a new era that is beginning for “smart contracts” supported by the Bitcoin blockchain. There are no more size restrictions. So there is a good chance that after receiving the Ethereum test network, many programmers will switch to Bitcoin with several billion on their host. Bad times for Ethereum and its $500 NFT transactions…

Key aggregation will also make it much more difficult to distinguish between transactions with one and multiple signatures, which is bad news for blockchain analytics companies such as Chainalysis, whose task is to violate the anonymity of BTC transactions by placing names on as many addresses as possible.

The right to privacy takes on full significance in these dark times of medical apartheid. We are oppressed by the dictatorship of health, which will worsen with the CBDC, which will end this dystopia, not allowing us to spend money as we see fit.

Last week, the governor of the Bank of France said that the decision to launch the “digital euro” (CBDC) will be made in 2023. This totalitarian perspective, which is gradually emerging, unfortunately bodes well for Bitcoin in 2022.

In conclusion, we note that Google’s search queries for the word “Bitcoin” in the US are only 25% of the peak value of 2017, while global queries are only slightly higher.

In other words, this bull race is just beginning, and, as billionaire Scaramucci says: “The value of the BTC will easily rise to $500,000. There are not enough bitcoins for every millionaire on earth.”