Though momentum has been somewhat choppy in the most recent trading, the prevailing sentiment in the cryptocurrency market this ‘Uptober’ – a popular nickname for October – is optimism.
After months of slightly downward trading, Bitcoin (BTC) broke with the trend and began its surge, finding a new footing near $68,000. This led many traders, experts, and observers to speculate how high BTC could go during the rally, with some speculating a rise to $86,000 by Halloween and $100,000 soon after.
Amidst the optimism, popular cryptocurrency analyst Duo Nine warned on X that ‘Bitcoin is in danger,’ with some of the long-term risks being the same as the current, short-term benefits.
Bitcoin is under a constant ‘vampire attack’
According to the expert, the increased rate of BTC adoption is, in some ways, a double-edged sword, considering how much Bitcoin activity is done through third parties and off the main chain.
Duo Nine singled out actors such as Coinbase (NASDAQ: COIN), BlackRock (NYSE: BLK), and the many BTC exchange-traded fund (ETF) issuers and practices such as wrapping – conversion of the cryptocurrency for use in the Ethereum (ETH) ecosystem – as the main culprits.
The analyst likened the phenomenon to ‘vampire attacks,’ as main-chain Bitcoin remains dormant while its value is exported and abstracted elsewhere. This, in turn, starves the primary network of fees, thus lowering the funds available for maintenance and security.
Additionally, in their assessment, Duo Nine also pointed toward the danger arising from the use of third parties in general as they could, at any time, ‘break their promise,’ thus leaving investors who do not hold Bitcoin directly but only derived representations of it exposed.
According to the trading specialistt, Satoshi Nakamoto also warned against this danger when he wrote that the main benefits of BTC are lost as soon as intermediaries are involved.
Duo Nine recommended self-custody and engaging with the main network through developments such as Ordinals as the best way to remedy this likely long-term ailment.
Bitcoin remains remarkably strong despite long-term risks
Finally, the issues stemming from the ‘vampire attack’ on Bitcoin are unlikely to play a major role for some time – at least for another decade, per the analyst – meaning the damage they might be doing will not be evident in the foreseeable future.
Elsewhere – and perhaps showcasing the long-term nature of the danger – Bitcoin has been performing well in recent weeks. In the last 30 days, the world’s premier cryptocurrency rallied 4.73%, with the most notable segment within the time frame being the 16% surge from October 10 lows at about $59,000 to BTC press time price of $68,810.
Additionally, while the 1.78% rise in the last 24 hours might appear limited, it marks another shift to the upside from a period of relative stagnation that started on October 21.
In total, Bitcoin is 60.93% above the price it started the year at, and 96.57% above its value exactly one year ago.
Featured image:
Kraft74. “Plastic Vampire Denture and Bitcoin Gold Coin.” Digital Image. Shutterstock. Shutterstock, January 15, 2019. Web. 28 Oct. 2024.
Source: https://finbold.com/bitcoin-is-under-vampire-attacks-warns-crypto-analyst/