Why does Bitcoin affect Ethereum (why does Bitcoin develop offline)

Why does Bitcoin affect Ethereum? Why does Bitcoin affect Ethereum In the past week, there have been significant fluctuations in ETH and BTC prices due to market turbulence. According to Glassnode’s data statistics, the price of Bitcoin has increased by over 15% since January this year. However, as the price of Bitcoin has fallen below $60000, it has remained sluggish

However, this is not a new phenomenon: when the price of Bitcoin falls, other Cryptocurrency perform much better than before – for example, mainstream Cryptocurrency such as XRP and BCH perform better (such as LTC). On the contrary, in some aspects, Bitcoin remains the number one digital asset by market value; In addition, according to Bitcoinist, the correlation between Bitcoin and Ethereum has been declining Although some analyses suggest that the increase in correlation indicates that Bitcoin will become a new means of storing value, this is not the case for many reasons. Firstly, Bitcoin itself has nothing special; Secondly, the DeFi project on the Ethereum network also increasingly relies on Ethereum as collateral for lending activities, which makes various applications in the Ethereum ecosystem more complex and expensive On the other hand, Bitcoin is currently not subject to strict regulatory scrutiny, and it may have a significant impact on Ethereum, especially for users who want to use Bitcoin due to its high degree of decentralization and slow transaction speed, making it unattractive. In addition, Bitcoin was recently accused by the U.S. Securities and Exchange Commission (SEC) of illegally issuing securities. Therefore, if the SEC continues to crack down on ICO, Ethereum must comply with the Bank Secrecy Act (BSA) and laws on Cryptocurrency activities

Therefore, we believe that although Bitcoin has a strong anti ASIC feature and can be used to buy or sell tokens to support Ethereum, there may be great risks in technology Why should Bitcoin develop offline Around December 16, 2017, BTC prices began to decline. Since then, the currency price has been fluctuating horizontally at a low level; In mid March 2021, there was another sharp decline. This surge is due to a shift in the attitude of global financial markets towards digital currencies. According to the latest document released by the US Treasury Department, there is currently no official recognition of encrypted assets as commodities. If the bull market in 2018 was caused by inflation, it will face greater economic and political impacts after May this year, so it is necessary to re-examine this issue But we must be clear that as the market continues to mature, mainstream investors increasingly recognize its existence and development potential, as well as the future direction of its values, it will become even stronger

First of all, Huo Coin, one of the largest digital currency exchanges in the world, also announced its support for the launch of Ethereum futures trading service. At the same time, Bloomberg reported that Firecoin is cooperating with some large technology companies to develop digital tokens issued based on ERC-20 token standard. Many enterprises, including Bitmain, plan to transfer their business to other blockchain projects by the end of 2019. However, the participation of these companies may hinder the rise in Bitcoin prices Secondly, since 2017, the price trend of Bitcoin has experienced a reversal and experienced multiple dives in January 2020. Although Bitcoin has continued to rise recently and broke through the $12000 mark, it has since suffered another setback Next, there is another piece of news worth paying attention to, which is that “Bitcoin” is about to break tens of thousands, and this statement is not accurate. Because in the recent bear market, people have been worried about whether Bitcoin can be sustained on it for the long term Bitcoin is a very unstable product, “said a well-known Bitcoin investor.” Many people believe that Bitcoin is now a very fragile market. “He also pointed out that” for most ordinary users, they may not buy or long, or even have no meaning at all. “He added. I believe Bitcoin will become a great hedging tool. However, as a risk averse tool, Bitcoin needs to be cautious – after all, you can never easily make the right decision unless your judgment is manipulated or causes losses, otherwise Bitcoin will ultimately fail. “Finally, the investor mentioned that if you really hold too much Bitcoin, It is recommended not to rush into investing when purchasing Bitcoin equivalent in fiat currency. He said that this approach is to prevent his own wrong behavior and avoid the outflow of funds However, this approach actually has its drawbacks, that is, many times, if you don’t have enough money to spend, you will use counterfeit coins, which is a typical speculative arbitrage behavior. In new things like Bitcoin, investors often focus on safer places. For example, at the end of October last year, some people claimed that a certain virtual currency was trapped in a death spiral due to certain technical malfunctions that could not be repaired,