In a recent episode of Cointelegraph’s Market Talks, Dan Rosen, the associate director of derivatives at Luxor, a US-based Bitcoin mining pool and service provider, discussed various topics related to Bitcoin. Rosen expressed his view on how the upcoming Bitcoin halving will impact BTC price, stating that Bitcoin’s volatility is likely to remain in the double digits for years to come. He compared Bitcoin’s volatility to that of tech stocks like Apple and Google in the early 90s, noting that as the asset becomes more investable and an ETF is launched, the volatility is expected to decrease, potentially reaching a more stable annualized asset class in the next few years.
Luxor’s hash rate derivatives offer miners an opportunity to hedge their exposure to changes in hashprice. Prior to these derivatives, miners had limited options for risk management within their operations. By allowing miners to predict and lock in future revenue during times of unexpected volatility, the derivatives enhance the stability and efficiency of their operations.
Concerning the macroeconomic impact on Bitcoin’s price and miners, Rosen mentioned that the market is realizing that the target inflation rate of 2% is unlikely to be achieved in the near future. As a result, the market is pricing in a longer-term inflation rate of around 2.5% to 3%. Additionally, the US dollar’s status as a safe haven asset is affecting equities and creating macroeconomic headwinds, leading to a devaluation of dollar-denominated assets. Despite the challenging economic outlook, Rosen believes that while Bitcoin’s price might not reach six figures before or after the halving, there may be new lows in the next six months due to macroeconomic factors, followed by a stronger rally.
