Welcome to the 57th issue of the Broker’s Beat. This week, Ethereum’s price begins to stabilize after the London hardfork, and Microstrategy makes another Bitcoin purchase of over 5,000 coins bringing the total of 114,042 BTC.
BY THE NUMBERS
Source: The Block
“The Development and Reformation Commission of China’s Inner Mongolia, previously one of the crypto mining hubs in China, said on Wednesday that it has hired a contractor to help the state monitor for illegal mining operations. ”
‘Mozilla’s Web Standards Lead, Tantek Çelik, has expressed opposition to cryptocurrency mining in a discussion over web standards.”’
“Bitcoin achieved the historic milestone of having successfully mined 700,000 blocks on September 11th in defiance of its critics. The feat was reached on the heels of several other successes including the setting of an all-time high and its rising adoption rates.”
“Transaction fees paid to bitcoin miners are at a low not seen since the Covid crash of March 2020, but experts think the decline is unlikely to affect the industry’s mining push into North America due to block subsidies which will remain in place until sometime in the spring of 2024.”
“The government of Laos has authorized six firms to trade and mine cryptocurrencies, ending a ban imposed in 2018, according to a recent notice from the prime minister’s office. ”
With the recent market recovery from $44K BTC/USDT spot price to its current value of $48K, we can say that the market is holding up pretty well. There are several factors to consider and we will have a look at what the charts say before touching on the major news for this week.
Important metrics have reacted to this market recovery and we can see this in the charts. The chart above illustrates the total Bitcoin reserve across all exchanges wallets. There was a downward shift in its overall value between Sept. 11, 2021 and Sept. 15, 2021 as the BTC reserve value decreased from 2.38M BTC to 2.37M BTC. A decrease in BTC reserve value means that there is less supply of BTC for selling and purchase of alt coins.
Let’s take another look at the chart above which indicates the BTC outflows for all exchanges. During the same period when the spot price for BTC/USDT increased (i.e. between Sept. 11, 2021 and Sept. 15, 2021), BTC outflow value increased significantly from 17.9k to 29.2k. This implies that more BTC was transferred outwards from exchanges wallets into external wallets for long-term HODLing. This will also reduce the selling pressure for BTC.
Mining power has increasingly become a metric of concern in recent times, especially following the great miner exodus out of China. However, this is not to be seen as negative news because this only confirms the decentralization of cryptocurrency and debunks any idea of monopoly that the Chinese provinces may have held in previous times when it comes to Bitcoin mining. Miners have now settled and begun operations in search for greener energy conditions in the US and Canada.
So far, the bitcoin network has consumed more power in 2021 than it did in all of 2020. According to the Cambridge Bitcoin Electricity Consumption Index, the Bitcoin network is projected to consume about 95.68 TWh by the end of 2021. The total value of power consumed in 2020 was approximated as 67 TWh.
When we study the hashrate chart shown above, we notice a general uptrend in hashpower since the China crackdown. However, there is a recent pullback from 136.2m TH/s to its current value of 132.7m TH/s.
Technical analysis and crypto news for this week suggests that the recent market recovery may see us retesting a new Bitcoin resistance at $50K soon. Things are looking good in the crypto market with BTC at $48K and ETH at $3.6K, especially with the golden cross that just occurred on the charts. Market bullish analysts are confident that we will see BTC price at $100K by the end of the year.
On Sept. 12, 2021, software company Microstrategy announced that it added more Bitcoin to its bag holdings. The company CEO, Michael Saylor, who is very bullish on Bitcoin, shared that his company bought 5,050 BTC for $242.9 million. The company is now HODLing a total of 114,042 Bitcoins and it doesn’t seem like they’re going to stop buying more anytime soon. Hopefully, more companies can follow suit as this will give BTC a push towards new all-time highs.
Ethereum traders are confident that there will be a recovery of ETH price to $3.8k levels. We have seen Ethereum hold steady above $3k since the London hardfork event that made the cryptocurrency deflationary. Traders now have more faith in Ethereum and believe that greener days are within sight.
Ark Invest CEO, Cathie Wood, also shares this belief and has proposed a ‘60% Bitcoin, 40% Ether’ split. Cathie believes that the value of BTC and ETH will continue to increase as long as big institutions continue to adopt them. She explained why this could mean BTC will reach 500k price levels in a video on Twitter.
That’s all for this week! Before we go, GDA Capital is running another summit, and this time it’s focused on Asia. It’s taking place on October 6th and 7th, and we highly recommend you check it out.
The Secure Digital Markets Team