Putting it out there that cryptocurrency is about to enter another bull run. Ethereum is still the best bet in terms of risk and returns imo. It's the only major blockchain that actually has a revenue model (selling blockspace) and is generating profit. In terms value settled daily it settles in the realm of 20-30 billion dollars a day on average whereas bitcoin is only settling 2-4 billion. Price targets are anywhere from 8-12kish based on diminishing returns from the last 2 market cycles.
I think this will be bitcoins last bull market before entering a multi-cycle secular bear market that may genuinely send it to zero. Bitcoin has major miner extractable value (MEV) flaws in its economic model that the bitcoin community is unwilling to recognize even exist. They will become pronounced by around 2030 and there is no narrative to carry bitcoin after ETF approval. Hyperbitcoinization isn't happening for a variety of reasons.
The MEV problem is complex and people write whole research papers about it. Here's a good one.
https://www.cs.princeton.edu/~arvindn/p ... ng_CCS.pdf
I won't claim to understand all the math but from what I do understand the root of the problem lies in bitcoin's declining block rewards. Every four years bitcoin's block rewards halve and the market right now loves it, it's core to bitcoin's value proposition to most people. Halving block rewards reduces bitcoin's inflation rate and thus new supply entering the market which has an upward pressure on bitcoin's price. The problem is that block rewards also pay miners to secure the network and those miners need payed more and more to keep up with bitcoin's increasing computational demands in order to stay solvent. With less bitcoin being payed out, and higher costs overall, the only way for miners to stay solvent is if the price of bitcoin rises proportionally to the halving in block rewards every 4 years, or... to "cheat."
Relying on block rewards has worked so far, but bitcoin can't go up in price like this forever unless it genuinely does replace every national currency on Earth which isn't going to happen for reasons I don't feel like I need to convince this community of. The hard limits of this growth are going to be apparent over the next 8 years imo. Some people have the crises point pegged farther along around 2040, but let's be honest, does anyone here actually see bitcoin being worth $500,000-$1,000,000 by 2028? Because I don't, and it doesn't match up with the diminishing returns of bitcoin's current market structure, and that is the kind of price that will be needed around then in order to maintain security of the network.
So what actually happens when bitcoin can't keep growing and its security is compromised? That paper I posted goes into different ways malicious miners will be financially incentivized to attack the network. 51% attacks to reorganize the blockchain, which, would allow miners to take funds from other people's wallets by redirecting their transactions to their own wallets. MEV on transactions will also allow miners to extract rent from people transacting on the network by taking extra fees beyond the one's the protocol defines. The situation gets bad pretty fast. I would not be surprised to see bitcoin trading at under $10,000 in 2030 and under $1,000 in 2040. The MEV problem will create a death spiral as capital flees out of the ecosystem or to another blockchain with a secure network. It's important to note though, this will not be a fast process, there's still enough room in the model for bitcoin to appreciate in value over the next year or so and there are some stopgap measures like increasing transaction fees that the bitcoin devs will likely attempt.
I don't expect the bitcoin community to be able to ideologically accept major changes to the protocol or giving up on the halving process though. Bitcoin could fork into a different consensus protocol like ethereum did, but it won't. The bitcoin community died when it refused to increase blockspace size back in 2017 and has only ossified more since. That's a whole different technical debate from years past but in essence the bitcoin community believes their economic model works when it doesn't and has refused to upgrade the network for years which is causing death by stubbornness. Once enough miners are attacking the network with regularity people's trust in bitcoin will reach a tipping point that I think will cause bitcoin to enter a market crash it never recovers from.
