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Bitcoin Mining Difficulty Reaches New All-Time High as Network Hash Rate Sets Record
Bitcoin mining difficulty surged by 3.9% on Tuesday, reaching an all-time high of 95.7 trillion, following a record seven-day average hash rate of nearly 724 EH/s. The difficulty adjustment occurred at block height 866,880, reflecting an increased computational power requirement as more miners compete to mine new blocks. This rise comes amid a significant recovery in the Bitcoin network’s hash rate, which had previously dipped after the April halving event. Despite lower post-halving revenues and increased difficulty, publicly traded miners are expanding their market share, with some pivoting toward AI and high-performance computing. Bitcoin is trading at $67,318, up 59.2% year-to-date.
Chainlink Co-Founder Launches Blockchain Payments Solution for Traditional Finance
Chainlink and Swift are launching a new blockchain integration to simplify digital asset settlement for financial institutions using existing infrastructure. The collaboration will allow institutions to use Swift’s messaging system to interact with blockchain technology, facilitating digital asset settlement with minimal adjustments. Chainlink co-founder Sergey Nazarov unveiled the integration at the Sibos conference, highlighting its potential to bridge decentralized finance (DeFi) and traditional finance (TradFi). The integration also includes Chainlink's Blockchain Privacy Manager (BPM) for private transactions, ensuring institutional privacy, though it may raise concerns over regulatory transparency and centralization.
Core Scientific to Expand CoreWeave Hosting, Aims for $8.7B in Revenue
CoreWeave has exercised its final option agreement with Core Scientific, adding 120 MW of infrastructure to power Nvidia GPU operations, bringing the total to 500 MW across six sites. This expanded partnership is projected to generate up to $8.7 billion in revenue for Core Scientific over the next 12 years. CoreWeave will invest $180 million in infrastructure, credited against hosting fees. The modifications to accommodate the additional capacity will begin in 2025, with operations expected by 2026. The deal diversifies Core Scientific's revenue streams, expanding its AI services alongside its Bitcoin mining operations.
Trading Desk Insights
Bitcoin's recent rally faltered, possibly due to stablecoin volumes remaining stagnant since late September. The correlation between stablecoin supply growth and upward cryptocurrency price movements is well-documented. Additionally, the temporary premium on perpetual contracts observed this Monday has dissipated, with the spot market showing signs of cooling off. The Fear & Greed Index has spiked to 72, marking its highest greed level since July.
On the macroeconomic front, the 10-year Treasury yield climbed to 4.25%, a peak last seen in July, propelled by strong economic indicators and concerns over the national deficit. Concurrently, the US Dollar Index escalated to a year-high, exerting further pressure on risk assets, including cryptocurrencies.
The political landscape is also influencing market sentiments. Donald Trump’s recent electoral success is viewed positively by traders, given his supportive stance on making the U.S. a leading player in the crypto arena. Conversely, Kamala Harris has taken a more cautious approach, focusing on consumer protection regulations without committing to the same level of industry promotion.
Despite these mixed signals, market participants are increasingly optimistic about Bitcoin's prospects. Options traders, in particular, are placing higher bets on Bitcoin reaching new highs by the end of November, as reflected in the elevated implied volatility for options expiring around the election.
In the ETF sector, Bitcoin witnessed a break in its seven-day rally, with net outflows hitting $79.1 million on notably low trading volumes, the weakest in two weeks. ARK led these outflows with $134.7 million. In contrast, Ethereum saw modest inflows of $11.9 million, primarily from Blackrock.
In recent market commentary, legendary trader Paul Tudor Jones highlighted his investment focus on Bitcoin, gold, and other commodities as crucial hedges against anticipated inflation, driven by increased government expenditures and potential tax reductions suggested by political figures. His views were shared during a CNBC interview, underlining the strategic positioning for upcoming economic shifts.
Crypto Charts
Disclaimer
This research is for informational use only. This is not investment advice. Other than disclosures relating to Secure Digital Markets this research is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. The information, opinions, estimates, and forecasts contained herein are as of the date hereof and are subject to change without prior notification. We seek to update our research as appropriate.
Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation. The price of crypto assets may rise or fall because of changes in the broad market or changes in a company's financial condition, sometimes rapidly or unpredictably. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments. We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.
The information on which the analysis is based has been obtained from sources believed to be reliable such as, for example, the company’s financial statements filed with a regulator, company website, company white paper, pitchbook and any other sources. While Secure Digital Markets has obtained data, statistics, and information from sources it believes to be reliable, it does not perform an audit or seek independent verification of any of the data, statistics, and information it receives.
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Crypto and/or digital currencies involve substantial risk, are speculative in nature and may not perform as expected. Many digital currency platforms are not subject to regulatory supervision, unlike regulated exchanges. Some platforms may commingle customer assets in shared accounts and provide inadequate custody, which may affect whether or how investors can withdraw their currency and/or subject them to money laundering. Digital currencies may be vulnerable to hacks and cyber fraud as well as significant volatility and price swings.
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