Cryptocurrency analysis firm DeFi Report (TDR) examined Bitcoin’s current state and potential future risks in its latest report. While the analysis highlighted that Bitcoin’s fundamental metrics remain strong, it also highlighted long-term strategic risks.
Experts in a DeFi report reevaluated the theory that Bitcoin is “digital gold.” Bitcoin’s hash rate, the most important indicator of network security, has increased 7.3 times compared to its price peak in 2021, and quadrupled since 2023.
The Spot Bitcoin ETF is said to be the most successful financial product in history. ETFs currently account for about 6% of total supply. The fact that investors are not selling assets despite market volatility indicates the emergence of a “diamond in hand” investor profile.
Michael Saylor’s company MicroStrategy holds about 3.5% of the total supply. The company’s debt structure is based on long-term unsecured bonds, so short-term liquidation risk is low.
This report clearly identifies three key risks facing Bitcoin.
When block rewards are halved every four years, miners’ income decreases. Currently, transaction fees account for only 0.4% of miners’ revenue. If the price of Bitcoin does not rise exponentially from cycle to cycle, the incentive for miners to secure the network may be reduced.
The possibility that quantum computers could break Bitcoin’s encryption system (ECDSA) between 2030 and 2035 is seen as a risk. However, experts believe the community will make the necessary updates to address this issue.
The fact that the number of active addresses has remained relatively flat since 2017 proves that Bitcoin is being used more as a “savings technology” than as a payment network.
Mike, an analyst at DeFi Reports, says the huge opportunity is that Bitcoin’s current market cap is around $2 trillion, compared to gold’s $30 trillion market cap.
*This is not investment advice.
