Welcome to the 51st issue of the Broker’s Beat. This week, we saw Bitcoin skeptic Elizabeth Warren make some positive remarks on the topic, while Amazon and Paypal are becoming more and more interested in implementing cryptos.
BY THE NUMBERS
“A new metric now indicates that miners may have completed their mining migration out of China. The chart shows that the bitcoin mining difficulty has now picked back up.”
Source: Bitcoin Magazine
“U.S. clients of Compass mining can now mine bitcoin directly into a Choice Individual Retirement Account without triggering a taxable event, per a press release sent to Bitcoin Magazine.”
“Bitcoin mining company Greenidge Generation is planning to increase the number of renewable energy sources available for use in New York.”
“Bitmain, one of the world’s biggest producers of cryptocurrency mining rigs, has divested from AntPool, the world’s largest crypto mining pool, likely as part of its plan for an initial public offering, Forkast.News has learned.”
“Bitcoin mining firms have been on a roll with fundraising since China outlawed them all on the mainland, and the latest to do so is Genesis Digital Assets.”
THE BITCOIN BEAT
A snapshot of Bitcoin’s spot price as of this writing is $39,835.22 representing 0.24% gain in the past 24 Hours and 3.62% decrease in trading volume. The 30-day volatility of BTC is 54.15%. Bitcoin remains the top cryptocurrency trading with a support at $35,000 and resistance at $42,000.
ETH is trading at $2,312.09 as of this writing, representing a 24-Hour increase of 1.10%, and 30-day volatility of 69.49%. Over the last 24 Hours, the trading volume decreased by 25.67%. As of today, ETH holds 17.83 % of the cryptocurrency market, making it the second-largest coin traded.
The value for BTC exchanges netflow as seen on the chart below is on a significant all-time-low of -57.4k BTC as of July 28, 2021, where BTC spot price is 40k. When we compare these values to those obtained on July 20, 2021, we see a remarkable difference ever since BTC’s price has been increasing steadily from 29.8k, and the BTC exchanges’ value was at -8.5k.
This marked increase in the negative netflow value means that more buyers have been accumulating BTC in external wallets as the outflow is greater than inflow. It means there is a reduced selling pressure for BTC in the past one week and is still accumulating.
When we also look at the BTC exchanges reserve chart below, we see more exciting information. Since BTC has been on a steady rise from about 34.2k on July 24, 2021, and 2.5M BTC held in reserve, this has also rapidly decreased to 2.42 BTC as the spot price for BTC increased to 40k as of July 29, 2021. This further confirms a reduced selling pressure for BTC and tells us that more traders are willing to hoard their BTC outside exchanges than usual.
The exchanges’ outflow chart also paints an interesting scenario. As of July 24, 2021, the value of BTC exchanges’ total outflow was 15.9k. Then this value suddenly spiked to 109.7k as of July 29, 2021. A whopping difference of about 93.8k BTC was transferred out of exchanges’ wallets into external hardware wallets! This means a decrease in BTC selling pressure and willingness to HODL by traders.
Since the hashrate analysis chart showed a bounce off the low support level of 84.79m TH/s on July 3, 2021, and increased to 104.6m TH/s on July 20, 2021, we have seen a sideways pattern on the chart with not much activity here.
As of July 28, 2021, the value of hashrate is 102.9m terahashes per second. We hope to see an increase going forward as more miners begin to operate fully with renewable or clean energy mining facilities set in place.
Notable mining firms such as BIT Mining are beginning to take action towards this. BIT mining has purchased 2,500 new mining rigs to be set up in Kazakhstan as the firm looks to bring in clean energy fees for crypto miners beginning from 2022.
So far, this week has been a good one with BTC trading steadily on green daily candlesticks as the price increased from about 29k to retest 40k resistance level. Despite this bullish move, we’re still in the phase of accumulation and fear. A couple of interesting news stories have been happening and we will touch on them below.
First, perhaps the biggest news so far is the interest of the biggest eCommerce store, Amazon, in crypto. Amazon recently voiced their interest in hiring people who can develop their own digital currency for them and this had a huge effect on the market sentiments as prices started to go up. Apart from this, an insider in Amazon revealed that Amazon is looking to start accepting payments in BTC, ETH, and Bitcoin cash as we head into the end of 2021. According to this insider, Amazon has been planning this since 2019. This has yet to be confirmed officially by Amazon. What would be even bigger for the crypto space and mass adoption is if Amazon also starts to accumulate BTC and announce this. We wait for a public confirmation from Amazon regarding this.
Tesla’s CEO and second richest person in the world, Elon Musk, revealed that he owns and HODLs BTC, Ethereum and Doge. He also said that SpaceX and Tesla own BTC. This was during the B-Word event that took place last week with Twitter CEO Jack Dorsey. There’s also news about Twitter going in heavier on cryptocurrencies as they add more utility. Twitter will most likely be acquiring a huge amount of BTC going forward.
There have been rising concerns about regulations in the crypto space. While we believe that regulations are good and healthy for the crypto space, in the long run, it is sure to cause panic short term. However, something interesting that happened on July 28, 2021, may cause us to begin to see greener days ahead. Senator Elizabeth Warren, a known Bitcoin skeptic, recently made positive remarks about BTC in her interview with CNBC. Warren, who is known to refer to Bitcoin as several demeaning terms and rate it lower than the traditional finance system, now has a different opinion and believes that BTC may indeed be a solution to problems faced by traditional banking systems. She said:
“There has been an enormous failure by the big banks to reach consumers all across the country. Digital currency and central bank digital currency may be an answer there.”
However, Warren still emphasizes that the lack of regulations in cryptocurrency increases the amount of scams and imposes a greater loss to be borne by traders, especially the smaller investors. We truly agree with this and hope to see improvements in this aspect as we get more mass crypto adoption.
More news on massive adoption comes as PayPal is set to roll out its ‘super app’ for crypto in the coming months. PayPal has over 400 million users and Venmo, a payment firm owned by PayPal, also has over 76 million active users. With the recent announcement by the CEO of PayPal, stating that this app will increase more crypto-enabled functionality and permit traders access to additional capabilities including savings with APY earnings and direct deposit features.
Finally, we’re set to see Cardano launch the Alonzo smart contract main net which will complete the Goguen phase. The Cardano Community is eager to see this come to fruition as there was a delay in the previous schedule for August 1. Once this is up and running, the ERC-20 converter will allow projects to easily switch from Ethereum to ADA blockchain.
That’s all for this week! If you have any questions about what we talked about here or would like to explore trading with us, please reach out here.
The Secure Digital Markets Team