Welcome to the 52nd issue of the Broker’s Beat. This week, we welcome the keenly anticipated Ethereum upgrade – the London hard fork – and mark Uruguay as the third country to accept cryptocurrencies.
BY THE NUMBERS
SNIPPETS
Data for DeFi: Switzerland’s Swisscom Joins Chainlink as Node Operator
Source: Blockworks
“Telecoms like Swisscom want exposure to DeFi and Blockchain without running mining equipment, explains Chainlink Co-Founder Sergey Nazarov.”
French Euronext to List Bitcoin Mining ETF
Source: TrustNodes
“A French investment manager, Melanion Capital, has gained approval to list a bitcoin equities Exchange Traded Fund (ETF) on Paris headquartered Euronext which has some €5.6 trillion in listed assets.”
The9 expands to Kazakhstan with new crypto mining joint venture
Source: Forkast
“The9 Ltd., a Chinese gaming company that only a few months ago pivoted to crypto mining, has signed a term sheet through a company unit with an enterprise in Kazakhstan to set up a joint venture.”
Fidelity Buys 7.4% Of Bitcoin Mining Company Marathon Digital Holdings Across Multiple Funds
Source: Forbes
“On July 22, Fidelity Investments Inc. purchased a 7.4% stake worth approximately $20 million in Marathon Digital Holdings, one of the largest bitcoin mining operations in North America, across four broad index-based funds, Fidelity Extended Market Index Fund (FSMAX), Fidelity Nasdaq Composite Index Fund (FNCFX), Fidelity Total Market Index Fund (FSKAX) and Fidelity Series Total Market Index Fund (FCFMX).”
Publicly-Traded Firm Gears Up To Become One of the Largest Bitcoin Miners After $120,000,000 Deal
Source: The Daily Hodl
“Crypto mining giant Marathon Digital is primed to become one of the largest Bitcoin miners in the world after inking a multi-million-dollar deal.”
THE BITCOIN BEAT
BTC/USD
A snapshot of Bitcoin’s spot price as of this writing is $37,815.84 representing 2.57% increase in the past 24 Hours and 9.64% increase in trading volume. The 30-day volatility of BTC is 53.46%. Bitcoin remains the top cryptocurrency trading with a support at $35,000 and resistance at $40,000.
ETH/USD
ETH is trading at $2,656.85 as of this writing, representing a 24-Hour increase of 2.40%, and 30-day volatility of 67.69%. Over the last 24 Hours, the trading volume increased by 42.79%. As of today, ETH holds 17.94 % of the cryptocurrency market, making it the second-largest coin traded.
INFLOW/OUTFLOW MONITOR
The market has started to recover and is holding off at a sideways trading pattern for the past week. There has been a significant pattern switch in the outflow value of BTC from exchanges compared to where it was last week.
From a careful study of the chart above which shows metrics for all exchanges netflow, we can see that there was a positive netflow figure of 96.18 BTC on Tuesday, August 3, 2021. This was indeed a marked difference from where it was as at July 28, 2021 with a negative netflow figure of -60.4 BTC. This means that we have more Bitcoin inflow to exchanges in excess of outflow to external wallets, thereby increasing the availability of BTC for trades on exchanges. During this period, the spot price for BTC against USDT changed from 40k to 38k.
These findings are also congruent with the chart above representing all exchanges reserve for BTC. On July 30, 2021, when the BTC spot price was 42k, the total amount of BTC reserve in all exchanges was at a low of about 2.43M BTC. This value increased to 2.44M BTC on August 3, 2021, which shows a recovery in BTC reserve on all exchanges and an increase in BTC availability on exchanges.
HASHRATE ANALYSIS
The switch in mining power from the Asian to the Western world has indeed been a way to promote crypto decentralization and remove the China mining monopoly. The average hashing power value has surged since we last discussed on the topic for the previous issue of the Broker’s Beat from 102.9m TH/s to 110.9m TH/s as at August 4, 2021. As more crypto traders continue to push for green mining global conditions, we expect to see better recovery towards the all-time hashing performance of about 180m TH/s.
As mentioned last week, companies like BIT Mining are involved in seeing this come to a fruition. However, Marathon Digital, a company bent on becoming the highest United States bitcoin miner, recently acquired additional 30,000 mining rigs to add to the previous 103,000 rigs which it possesses. This will enable the company to deliver an estimate of 13.3m TH/s, giving it a 12% portion of the total Bitcoin mining hashrate.
TRADER’S DIGEST
Since the market recovery and gain in previous resistance levels of 40k, we have watched the crypto space get flooded with much attention. Based on our fundamental analysis, it seems like we may be headed into FOMO as the FUDs are beginning to die out. Here are some of the most important crypto news to be aware of.
First, the Ethereum London hardfork is scheduled to take place today August 5, 2021. This major network upgrade is perhaps one of the most anticipated crypto events and will usher in the EIP-1559. This upgrade will address the excessively high ETH gas (transaction) fees among other network issues. However, we need to trash out the common misconception that this upgrade will automatically make Ethereum deflationary. The London hardfork will not make Eth deflationary overnight because as ETH will now be burned with every transaction, it is still being mined. For ETH to fully become a deflationary asset, more Ethereum has to be burned than it is mine and so we have to see how this plays out. However, this upgrade is still very bullish news for Ethereum in the long run.
Second, Uruguay is set to be the third country to push for a bill making cryptocurrencies a safe and acceptable payment method after El Salvador and Paraguay. On Wednesday, August 5,2021, Senator Juan Satori, a member of the Uruguayan ruling party, proposed a bill that, unlike El Salvador’s, doesn’t seek to make cryptocurrencies a legal tender. Instead, it states that:
“…crypto assets will be recognized and accepted by the law and applicable in any legal business. They will be considered a valid means of payment, added to those included in the Law of Financial Inclusion.”
Finally, regulation news and concerns from the SEC are now starting to look bullish as the SEC Chair, Gary Gensler, explained in an interview how they plan to introduce a safe trading environment as well as crypto ETFs. Gensler emphasized the introduction of investor protection and how the SEC plans to curb the alarming number of scams within the ‘Wild West’ crypto space. We believe this may cause some short term panic but however is good and healthy for the crypto space in the long run.
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.
Happy trading!
The Secure Digital Markets Team
