Bitcoin fans have come up with a new phrase for the cryptocurrency that suggests it doesn’t really matter what the coin’s price is in fiat currency.
Cryptocurrency prices slipped recently as Bitcoin fans came up with a new line to describe the world’s most popular digital currency
After a sharp decline of price in 2022, Winston Ma, managing partner of CloudTree Ventures, said the latest phrase used by Bitcoin’s fans to describe the cryptocurrency is “1 BTC = 1 BTC.”
Making the Rounds
“This expression is making its rounds on Twitter (TWTR) – Get Twitter Inc. Report in recent days, where users suggest that it doesn’t really matter what the coin’s price is in fiat currency like the U.S. dollar,” he said.
Ma, author of “Blockchain and Web3: Building the Cryptocurrency, Privacy, and Security Foundations of the Metaverse,” said Bitcoin believers are suggesting that “BTC will eventually become a unit of account so just focus on the absolute number of BTC you own today.”
“Furthermore, 1 BTC = 1 BTC probably also means that the changing inconsistency of the dollar leads to distortion in ‘measurement’– read: ‘prices’–of assets, but BTC will keep its intrinsic value, like the light of speed is constant,” he said. “But only time will tell.”
Bitcoin was down 1% to $19,925.50 at last check on Oct. 6, according to data firm CoinGecko. Ether, the native currency of the ethereum blockchain, slipped 0.9% to $$1,351.74, while dogecoin dropped 1.1% to $0.064312.
Billy Endres, cryptocurrency expert with Finder, said the majority of the crypto market remains in a well-defined multi-month trend.
The outlier — as far as high cap trading pairs — is Ripple, which he said has dominated the rest of the market, gaining over 20% in the last two weeks.
Ripple vs SEC
In 2020, the Securities and Exchange Commission filed suit against Ripple Labs Inc. and two of its executives, charging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.
“XRP’s price action followed advancements in its long-running lawsuit with the SEC, which may finally draw close,” Endres said. “Both parties filed motions requesting that judgment be made without going to trial as to whether or not Ripple is to be considered a security.”
It is one of the first cryptos to break out of its long-term range and is currently trading around its $0.50 resistance level, he added, “a clear target for traders to take profits.”
“The rest of the market seems largely unaffected by the Ripple vs SEC lawsuit and XRP’s price response,” Endres said. “However, Bitcoin is showing positive signs of a recovery and a potential range breakout, currently holding above $20,000. Exchange reserves for Bitcoin are at yearly lows, with approximately 2.25 million BTC being held on exchanges.”
He said this demonstrates that investors are comfortable holding their Bitcoin and are opting to remove their coins from exchanges.
“If exchange outflows continue, the market may experience a lack of BTC supply, pushing prices to the upside,” he said. “This lack of tradeable BTC could be the determining factor that drives it out of its trading range, finally sparking a bull run.”
‘Saving Customers from Themselves’
“One of the most interesting revelations contained in the report is that, despite the crypto wipeout caused by unsecured lending, many are still doing it and that the industry insiders actually see the level of this type of activity is increasing,” he said.
Lesperance said this is another area where Crypto lenders are not yet required by regulators to hold capital or liquidity buffers like traditional lenders.
“This means when there is a downturn in the crypto market lenders are exposed when a shortage of collateral in a loan situation forces the lender–and it lending customers–to absorb large losses,” he said. “Of course these losses are greatly amplified by leverage, which too often wipes out any customer deposits.”
Lesperance said this is yet another case of the crypto world wrongly believing that the normal “risk to return” rules don’t apply.
“This misconception quickly evaporates when a margin call is made in a slow-down of growth or even downturn,” he said. “Yet another area that will see regulators rush in to save retail crypto customers from themselves.”