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Bitcoin (BTC) Heating Up as Sentiment Improves Despite Pending Anti-PoW Campaign

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As April nears, it looks as though Bitcoin and the broader digital asset market will close out the month on a high note.  With the world’s top digital asset, Bitcoin (BTC), sitting just over $47,000 at time of writing, sentiment surrounding market direction in the near future has seen a notable uptick.  The following are a few reasons for this recent resurgence.

Two Parties. Two Perceptions.

One major reason for the on-going shift in sentiment surrounding Bitcoin is government adoption.  We briefly touched on this recently, highlighting various examples of cities using BTC as a means of payment for certain services and taxes.

While adoption is indeed growing, not all politicians and lawmakers are convinced of the merits behind Bitcoin.  This was recently made clear in Canada, as members from the nation’s two largest political parties demonstrated a stark difference in approach towards digital assets.

Prime Minister and Liberal Leader Justin Trudeau made waves weeks ago when a drawn-out protest in the nation’s capital resulted in various financial sanctions against participating parties.  These sanctions controversially saw the government demand that various digital asset service providers freeze client accounts.  This divisive decision toed the line between what was necessary, and what was perceived to be a breach of expected financial freedoms.

Seeing where the Liberals stand with regard to digital assets, it is refreshing to see representatives of its counterpart, the Conservatives, take a more accepting approach.  Pierre Poilievre, a candidate for leader of the Conservative Party, made his stance clear by recently completing a small purchase at a local restaurant through the use of Bitcoin and the Lightning Network.

In only a few tweets, Pierre Poilievre has established the following point surrounding his approach to digital assets.  He would like to see,

  • Bitcoin thrive
  • Lower costs of financial services
  • Expand choice of financial services
  • Create thousands of jobs
  • Power taken back from bankers and politicians, and put in to the hands of the consumer
  • Keep crypto legal
  • Make Canada the ‘blockchain-capital of the world’

Beyond the political motivations behind this demonstration, it is also important as it highlights the continued growth of the Lightning Network, and its potential for use in every-day transactions – a feat that will allow for Bitcoin to move beyond being seen solely as ‘digital gold’ and also as a true currency.

Treasury Growth

On various occasions, we have looked at the growing amount of companies that have added Bitcoin (BTC) to treasury funds.  While we won’t go over each example again, there are two notable developments from the past week from both MacroStrategy (a subsidiary of MicroStrategy), and Terra’s ‘Luna Foundation Guard’.

MacroStrategy has successfully been granted a $205M loan from Silvergate Bank for the purpose of purchasing Bitcoin.  The loan, which is said to be collateralized by existing Bitcoin held by MacroStrategy, is described by representatives of Silverbank as being, ‘an exceptional example of how institutions can utilize their bitcoin to support and grow their business.’

On most days, a $205M loan for the purpose of buying Bitcoin would be big news.  This move has been overshadowed though, with the Luna Foundation Guard (LFG) being the talk of the town over the past week.  Responsible for overseeing the Terra ecosystem, LFG recently announced that it would be purchasing $10B worth of Bitcoin for the purpose of funding its treasury reserve.  As it stands, buying has already commenced, with roughly $1.3B already on the books, and more to come.  To keep track of these purchases moving forward, check out the following twitter bot, which has been tasked with monitoring LFG’s reserve wallet.

Changing the Code

For various reasons, not everyone believes in Bitcoin.  Some are against its ethos, while others believe better alternatives exist.  A prevailing and common talking point among detractors surrounds the energy usage of the Bitcoin network, and the effect it will have on the environment.

With this in mind, Greenpeace and Executive Chairman of Ripple, Chris Larsen, have purportedly scheduled an upcoming $5M campaign meant to convince the masses to change the code upon which Bitcoin is built.  This proposal, which would see Bitcoin do away with its Proof-of-Work (PoW) consensus mechanism, is expected to be widespread with purchased ads, and ‘grassroots movements’.  Unfortunately for those behind the proposal, major resistance can be expected.  Many believe fully in PoW, and also suspect that those behind the campaign underestimate their ability to bring such a change to fruition.  As such, many Bitcoin enthusiasts have responded mostly with incredulity.

Although each of the developments bode well for Bitcoin, it should be interesting to see if this pending campaign can achieve its goal.  For the time being, Bitcoin has shrugged off this news, with no notable effect on the market.

Resulting Promise

Regardless of the nature of why, recent events have resulted in Bitcoin displaying various promising indicators, and reason for optimism moving forward.

  • Public sentiment has begun to improve as evidenced by the popular ‘Fear and Greed Index’, which has shown a rise from 26 to 56 in a weeks-time.
  • Bitcoin pricing has displayed a desire to rise, with the asset price having approached the 200-day moving average.
  • April has overwhelmingly been a positive month for most of Bitcoin’s life

Although things may be looking up for the time being, it is important to remember that nothing is ever guaranteed.  The Federal Reserve is still scheduled to make multiple rate hikes over the coming months, which may result in a further withdraw from ‘risk-assets’ like Bitcoin.

Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

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