Welcome to the 47th issue of the Broker’s Beat. This week, Paul Tudor Jones gives Bitcoin some support, and India continues working on its crypto regulation bill.
BY THE NUMBERS
“Bitcoin mining firm Genesis Digital Assets has purchased an additional 10,000 Bitcoin miners from the ASIC machine manufacturer Canaan.”
“Some of China’s storied Bitcoin miners are planning to use more renewable energy sources to power their expansive mining rigs, local outlet CGTN said today.”
Source: The CryptoPotato
“Kraken’s CEO Jesse Powell advised Elon Musk to study how Bitcoin mining works more as he believes the asset is a lot greener than people realize.”
“Following the approval of KIP-9 by KyberDAO, it was announced today that crypto liquidity platform Kyber will deploy its new Kyber DMM (Dynamic Market Maker) protocol on the Polygon network on June 30th.”
“Estonian technology conglomerate Burfa is turning to Bitmain to supply key cryptocurrency mining infrastructure to its Narva-based data center, offering a glimpse into the arms race underway for high-performance computing resources.”
THE BITCOIN BEAT
As of this writing Bitcoin spot price is $37,091.81 USD, After reaching a 24-Hour high of $39,551.36, Bitcoin has slightly declined over the past 24 hours. A snapshot of Bitcoin’s spot price as of this writing is $38,974.08 representing a -2.84% drop in trading volume since June 16th at 11:30 am. The current market cap represents 45.34% of total cryptocurrency traded. Bitcoin remains the top cryptocurrency trading with a circulating supply of 18,737,150 BTC, an increase of 882 coins since yesterday. The 30-day volatility of BTC is 96.26%.
ETH is trading at $2,450.14 as of this writing, representing a 7-day decline of 4.15%, a 24-hour decline of 0.64%, and 30-day volatility of 131.79%. Over the last 24 Hours, the trading volume decreased by 4.0%. As of today, ETH holds 17.41% of the cryptocurrency market, making it the second-largest coin traded. It has a circulating supply of 116,328,685 coins, an increase of 14,568 coins since June 16th, 2021.
On the inflow/outflow front, we’re seeing a balanced sentiment emerge. The charts below show decreasing inflows *and* outflows, which demonstrates the mixed opinions present in the market right now.
As you can see, there is no real trend right now and this is more of an indication of rising tensions. We prefer to avoid trying to call what direction the markets will go in situations like this because of the unpredictability of these moments.
It’s common to see coins purchased early in a bull run get held longer, whereas the coins purchased later in the cycle are more likely to be panic sold. That’s one explanation for the trend we’re seeing above, and we expect it to continue until something breaks this sideways trading pattern.
The decline in hashrate could be attributed to China’s recent crackdown on cryptocurrency mining, which came amid concerns over the network’s energy use. Last week, China’s Xinjiang Uygur Autonomous Region, Inner Mongolia Autonomous Region, and Qinghai province announced plans to shut down some or all bitcoin mining operations. Some specialists believe that some miners may relocate to other countries.
The state of Texas is one choice, owing to its political and economic climate. The state boasts low-cost power and is striving to increase its renewable energy consumption. Wind energy provided 20 percent of Texas’ power supply as of 2019. Residents of the state also have the option of switching between multiple electricity providers. However, this is only half of the issue because nations like Qatar and Iran also have inexpensive electricity, but miners aren’t interested in going there.
As the below chart shows, the hashrate fell to 129.1 million exahashes per second this week, which is significantly below the all-time high of 180.6 million exahashes per second in mid-May.
This has been an exciting week in crypto, with some solid support coming to Bitcoin from well-known trader Paul Tudor Jones. On CNBC, he said “I like $BTC. BTC is math & math has been around for thousands of years. I like the idea of investing in something that’s reliable, consistent, honest & 100% certain.”
We’re constantly looking for developments that will bring more money into the crypto economy or help keep it here. So we were excited to see that Coinbase will be allowing US customers to borrow against their Bitcoin. This will be limited to certain states, but the opportunity to borrow up to 40% of their holdings in cash without having to sell is definitely going to remove selling pressure.
Next, there is news that the KiwiSaver Growth Strategy fund, which is part of New Zealand’s national KiwiSaver programme, has put 5% of its money into Bitcoin. The program serves as a retirement savings vehicle for New Zealanders, and is similar to a 401k in the United States. According to local news outlet Stuff, the KiwiSaver Growth Strategy fund has roughly $244 million in total investments ($350 million New Zealand dollars). That marks it as a relatively small player, but if we see more pension-like funds putting money into Bitcoin, that will be a strong positive indicator for mass adoption.
Finally, it looks like India’s push to ban cryptocurrency was just the opening move in their “negotiations”. Authorities have decided to designate cryptocurrency as an alternative asset class rather than imposing a blanket ban. According to reports, the Securities and Exchange Board of India will be in charge of supervising crypto legislation in the country. During the Monsoon Session, Parliament will discuss a comprehensive crypto regulation bill.
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