Environmental protection and regulation: Stopping the cryptocurrency “institutional bull” Ether’s “gear shift” is expected

Different people have different opinions on whether it is the middle of a bull or a bull-bear shift.

Environmental protection and regulation: Stopping the cryptocurrency "institutional bull" Ether's "gear shift" is expected

Institutional bulls have been hit hard by Musk, and whether Ether can pick up the slack carries the hopes of the industry.

Whether the bull market has reached the middle of the bull, or the conversion of the bull and the bear, different people have different opinions.

In the live broadcast of Godfish and Sun Yuchen on May 20, it was clear that their confidence was not so full. In the live broadcast at the end of 2020, Sun Yuchen, Jiang Zhuoer and others were confidently shouting $100,000. But in yesterday’s broadcast, Sun Yuchen adjusted it to $50 to $100,000, and Godfish was more conservative at $30 to $100,000. They said the odds are that it’s still mid-bull, similar to June 2017, when the coin price fell due to the Core community split and the EOS bloodsucking.

They also all agree that Musk is a major reason for the current bull drop. Sun Yuchen believes that Musk’s back-and-forth, which led to the confusion of community values, was the core cause of the decline; Godfish believes it was the trigger. In addition, Wu Jihan believes that a “raging bull market” is coming, and Jiang Zhuoer and others agree with the “bull in the middle” view. But more relatively conservative industry leaders believe that we need to wait and see.

Our view on this is different. We believe that Musk’s attack on Bitcoin’s environmental problems has had a significant impact. There is no denying that this bull market can be referred to as the “institutional bull”. Grayscale started the first wave, Microstrategy and others picked up the second wave, and Musk’s support and Tesla’s $1.5 billion purchase of bitcoin was the third wave.

The Chinese mindset may not understand the “political correctness” of environmental protection in Western societies. Musk has suddenly backtracked and harped on the issue, retweeting the FT story again yesterday: “It’s a dirty currency. The article, which is quite a headline party, claims that clean energy use in mining is currently at 39%. This, despite being a not insignificant figure and continuing to increase, is still unsatisfactory for Musk.

Environmental protection is a political issue in developed Western societies similar to gender and race, and the consequences of Musk’s “heavy-handedness” are that large internet companies (e.g. Apple, Microsoft, Amazon, Netflix), mainstream celebrities (e.g. JK Rowling, who has expressed concern), and entertainment stars are having a hard time publicly announcing their support for bitcoin or even buy bitcoin. This is a serious blow to Bitcoin’s fledgling “institutional bull” and positive influence in pop culture.

In the foreseeable future, the new energy use of bitcoin will gradually rise, eventually coming to over 60%. But the total amount is still huge, and fossil energy is extremely plentiful and stable and cheap in places like Central Asia and the Middle East, making it hard to convince them to give it up. So it’s also hard to expect Bitcoin’s environmental problems to get the kind of solution Musk is hoping for.

Another driver of the current bull market is the rise of Ether’s DeFi ecosystem and the ensuing exchange public chains like Layer 2, Poca, Solana, BSC, and others. This brings us to the second issue of the current bull market: the threat of regulation.

In the early hours of May 21 Beijing time, a U.S. Treasury Department report attacking cryptocurrencies for tax evasion and calling for increased regulation triggered a sudden drop of more than 6% in bitcoin. But then prices began to pull back as more details of this report were explained, such as the implementation of the reporting system starting in 2023 and simply applying the current rules for dollar cash.

However, it is certain that the current ruling US Democratic administration’s attitude towards financial regulation as well as cryptocurrencies must be relatively conservative and more inclined to protect the interests of grassroots investors rather than financial innovation. Cryptocurrency is already under investigation by almost all U.S. departments involved in cryptocurrency. On the other hand, the EU, South Korea, Turkey, Vietnam and other regions where cryptocurrencies are active are still in the process of introducing regulatory policies, and the current “Wild West” phase is unlikely to continue.

DeFi is the wildest part of cryptocurrencies. It is the purest state of financial freedom and is in line with the decentralization of cryptocurrencies, but a lot of black money, hacking and underground trading are conducted through DeFi. As it grows, will it come under the scrutiny of the US government along with other governments? That’s a given.

Another reason for this round of decline is Chinese regulatory policy. China’s current stance on cryptocurrencies is clear: first, ban all institutional participation, call on the general public not to participate and block payment channels; second, beware of social mania and mass incidents. Thus you can see that the three associations under the central bank issued a warning immediately after the recent zoo fire.

A new phenomenon is that the domestic mining industry may be hit relatively hard as China set a political goal of carbon neutrality to the world last year. Inner Mongolia has already been heavily decommissioned, while other regions are still in the research stage. The transfer of mining sites will have little impact on the price itself, but more a kind of emotional panic on the western society.

Overall, we believe that the two core forces of the current bull market have been hit to some extent, so it is difficult to feel optimistic about the “continuation of the bull market”. The only variable is ethereum, which has previously been widely seen as the new engine of the bull market, surpassing bitcoin in terms of market cap this round.

The July Ether EIP-1559 will solve the problem of Ether’s inability to capture value from the ecosystem and raise prices. When the Gas fee skyrockets, Ether will see huge destruction, which will greatly boost the price. On the other hand Ether developers are moving full steam ahead towards the POW to POS at the end of the year. the POS when completed will save 99% of the current energy with absolutely no environmental concerns.

However, this is just a good expectation for industry players, Ether has too many variables, it is also far less stable and sturdy than Bitcoin, and new problems are bound to arise then, such as the aforementioned DeFi regulation issue.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/environmental-protection-and-regulation-stopping-the-cryptocurrency-institutional-bull-ethers-gear-shift-is-expected/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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