Bitcoin Newsletter Week 19 2024

Weekly update on all things Bitcoin

May 14, 2024

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TL;DR

  • BTC is down and underperformed ETH this week 

  • Botanix Labs Secures $8.5M Funding for Bitcoin DeFi

  • Wells Fargo Joins the Bitcoin ETFs

  • Bitcoin ETFs for Mainland China on the Horizon

  • Mainnet of Build on Bitcoin Goes Live

  • Bitcoin Reaches 1B Transactions Milestone

  • Lightning Network Explores Bitcoin-Backed Stablecoins

  • Swan Launches Managed Bitcoin Mining Service

  • Genesis Digital Assets Sets Up Shop in Argentina

  • Canaan Inc. Launches Industry-leading A1566

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Bitcoin Price

Crypto is stagnant this week, with BTC being down 1.6% and ETH up 5.4%!

Bitcoin dominance has been decreasing over the week, starting at around 50.8%, topping at 51.3% and ending the week around 50.9%. Capital often starts to flow into ETH and other altcoins as the price is increasing for more risk-on assets as well, causing a lower Bitcoin dominance as we have started to see over the course of multiple weeks.

It’s going to be interesting to see whether this trend will continue in the short term, as capital in crypto tends to flow initially to BTC and then further out on the risk-curve, starting with altcoins like ETH and then into mid- or low-cap coins.

The Bitcoin halving is coming up this week. If history is any guidance we will continue to see BTC dominance climb up until after Bitcoin halving, whereafter people start to look for higher return moving further on the risk curve entering altcoins. This typically starts with ETH, and then on to mid- and low cap coins. Other coins being moved into are typically “ETH killers” like SOL, AVAX and other other L1s. Yet ETH is still the king amongst altcoins, as price action this week also shows.

With BTC dominance decreasing and the ETH price decreasing more compared to BTC, the BTC/ETH ratio is trending up ending the week around 20.9 ETH per BTC, underlining that BTC continues to be king in crypto, but alts like ETH are gaining momentum.

Financial News

Botanix Labs, a Bitcoin development startup, has secured $8.5 million in a seed series funding round from Polychain Capital, Placeholder Capital, Valor Equity Partners, and ABCDE. The funding will support the creation of a Bitcoin-native DeFi ecosystem.

Based in New York, the company intends to utilize the funds to construct Spiderchain, a Bitcoin-native Layer 2 protocol with full Ethereum Virtual Machine compatibility. Specifically, Botanix Labs plans to expand its team and concentrate on product development with the capital injection.

Wells Fargo revealed its investments in Bitcoin exchange-traded funds offered by Grayscale and ProShares. According to reports, Wells Fargo disclosed ownership of 37 shares of the ProShares Bitcoin Strategy ETF (BITO), which provides exposure to BTC futures, and 2,245 shares of Grayscale Bitcoin Trust (GBTC), recently converted to an ETF. Additionally, the firm reported ownership of 52 shares in Bitcoin Depot, a provider of crypto ATMs.

The combined value of these three Bitcoin-related investments amounted to $143,111. Despite this, it represents a relatively small portion of the major bank's holdings, considering Wells Fargo's reported assets of approximately $1.7 trillion as of June 2023, positioning it as the third-largest bank in the U.S.

The CEO of Harvest, the issuer of a spot Bitcoin exchange-traded fund (ETF) in Hong Kong, aims to extend accessibility of its Bitcoin ETF to investors in mainland China.

Han Tongli is exploring avenues to enable mainland Chinese investors to access Harvest's Bitcoin and Ether ETFs by offering these products through Hong Kong's ETF Connect framework.

Launched in 2022 and approved by both the China Securities Regulatory Commission and the Securities and Futures Commission, ETF Connect facilitates interaction and integration between Hong Kong and mainland China. It aims to provide diverse asset allocation options and enhance liquidity.

Adoption News

This week, the Build on Bitcoin (BOB) initiative unveiled the commencement of its initial phase, allowing decentralized applications (dapps) to engage with the world's leading blockchain.

According to announcements on Twitter by the BOB team, the BOB mainnet is now live with a total value locked (TVL) of $300 million and boasts over 40 available dapps. The team heralded "a Bitcoin-driven DeFi summer," promising more developments in the coming three weeks.

Build on Bitcoin is designed to function as a hybrid layer-2 network, akin to an "Ethereum rollup," amalgamating Bitcoin's widespread adoption, liquidity, and proof-of-work security with Ethereum's decentralized finance (DeFi) functionalities, including smart contracts, wallets, and access to stablecoins.

The Bitcoin network has successfully completed its one billionth transaction, marking a significant milestone for the network 15 years since its inception. According to Clark Moody's Bitcoin dashboard, transaction 1,000,000,000 was confirmed in block 842,241 at 9:34 pm UTC on May 5th.

This achievement comes 15 years, four months, and four days after the pseudonymous creator of Bitcoin, Satoshi Nakamoto, mined the network's inaugural block on January 3rd, 2009. Throughout its 5,603-day existence, the network has averaged 178,475 daily transactions.

According to Lightning Labs CEO Elizabeth Stark, the developer behind Bitcoin's Lightning Network, they have experimented with a protocol aimed at facilitating the issuance of stablecoins on the Bitcoin blockchain. Speaking at this week's Financial Times Crypto and Digital Assets Summit, Stark revealed that the developer had recently conducted a test transaction on the Lightning Network using an asset generated through the Taproot Assets protocol.

"We've released an initial segment of the code back in October, and just this past Thursday, we demonstrated the first-ever transaction on Lightning involving an asset," Stark stated. She elaborated, "The goal is to introduce crypto dollars and stablecoins onto the Bitcoin blockchain."

Mining News

Swan Bitcoin introduces its Managed Mining service tailored for institutional investors through a strategic partnership with Tether, with the goal of reaching 100 EH by 2026.

As a frontrunner in Bitcoin mining innovation, Swan Bitcoin unveils Swan Managed Mining, offering a customized solution for institutional investors looking to allocate $100 million or more into the Bitcoin mining sector.

Genesis Digital Assets Limited (GDA), a prominent figure in the Bitcoin mining sector, has announced its intentions to establish a new mining operational center in Argentina utilizing flared gas.

This initiative signifies the company's strong entry into South America, complementing its existing network of 20 industrial-scale data centers spanning across North America, South America, Europe, and Central Asia.

According to the official press statement, the new facility, situated in Rincón de Los Sauces, Neuquén province, will be fueled by Argentina's leading electric power generation company, YPF Luz.

With a total capacity of 7 MW and backup power of 1 MW, the data center will harness electricity generated from stranded gas provided by YPF Luz, effectively converting flared gas into electricity to support Bitcoin mining operations.

Canaan Inc. has introduced the new Avalon A15 series, the A1566 model. This latest bitcoin mining machine integrates Canaan’s cutting-edge technology. The A1566 model establishes a new standard for performance, boasting an outstanding energy efficiency ratio of 18.5 joules per terahash (J/T), a hashing power of 185 terahash per second (TH/s), and consuming 3420 watts of power.

This lineup underscores Canaan’s heightened dedication to product advancement, market analysis, and partnership collaboration in delivering robust, high-quality mining solutions. The Avalon A15 series is designed to elevate user profitability, underscoring Canaan’s steadfast commitment to pioneering innovation within the blockchain domain.

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