Unbounded Capital's managing partner Zach Resnick made an ominous prediction when he advised the world that Bitcoin (BTC) would experience high transaction fees, increased block time, and a clogged mempool; unfortunately, his prediction has become a reality.
Chances of a flash crash In essence, he claims that buyers and sellers are not respecting the crisis that Bitcoin is experiencing. While there's only a miniscule possibility that the chain will disappear as a result of a crash, it is a frightening scenario that should be considered more deeply. He also expressed his alarm that Bitcoin would experience a flash crash.
While Resnick's input doesn't reek of bias, he is speaking from a camp that supports Bitcoin SV (BSV) and is of the opinion that Satoshi Nakamoto is a pen name for Craig Wright.
Network activity supports Resnick Resnick's belief is that the halving, which chops the block reward, will trigger a severe amount of holders to stop mining Bitcoin. This leads to a cycle where a lowered hashrate congests the network, and then the congested network decreases the chance of more miners adding to the hashrate. Quickly, a lack of newcomers and more miners leaving the network can completely kill the chain.
Part of what caused this situation was a massive hashrate drop to the tune of 30% in just three days. Because of this, the mempool has become swamped with transactions that haven't been processed due to a high block time interval. Bitcoin works by having its transaction fees defined by its overall supply and demand. A decimated supply has led to skyrocketing transaction fees, which further makes Bitcoin unappealing to miners.
Resnick's thoughts are valuable in theory, but shouldn't be taken too seriously. So many people have an interest in Bitcoin that it's unlikely to go through the flash crash that would end up destroying interest in the cryptocurrency. While it is far from impossible that Bitcoin will fall apart completely, there is no doubt that it's feeling the effects of global economic instability. The more likely scenario is that it establishes a new normal after a period of adjustment.