The recent price fluctuations of Bitcoin, the top cryptocurrency, have sparked a range of opinions from experts. TXMC, a renowned crypto analyst on X, has recently criticized Bitcoin predictions, stating that the value of the asset is not determined by a “Power Law,” but rather by supply and demand. On their official social media account, the analyst discussed the factors that influence Bitcoin’s price.
In simpler terms, the price of Bitcoin is not governed by a complex mathematical formula. Instead, it is influenced by the bids and asks of buyers and sellers. The analyst dismisses the notion of a “Power Law” and likens it to the debunked Stock 2 Flow model, which has been discredited in the past.
According to TXMC, the value of Bitcoin is determined by the basic principles of supply and demand, rather than any mystical properties that some content creators may believe in. The analyst argues that these properties are not relevant to the open market and should not be relied upon for price predictions.
The analyst also highlights the uncertainty that comes with investing in crypto assets. They mention the challenges faced by new Bitcoin users who lack sufficient knowledge and understanding of the market. These users often turn to analysts in the hopes of achieving financial success, but the analyst warns against blindly following their guidance.
TXMC suggests that analysts take advantage of the limited knowledge of newcomers by presenting the Bitcoin market as governed by scientific formulas. This tactic keeps investors unaware of the risk factors, market psychology, market forces, and human emotions that play a significant role in determining prices. The analyst asserts that such concepts are misleading and false, despite their appealing nature. They also caution against scams that promise shortcuts or formulas for guaranteed success, as no such guarantees exist in reality.
