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- Bitcoin Newsletter Week 22 2024
Bitcoin Newsletter Week 22 2024
Weekly update on all things Bitcoin
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TL;DR
BTC is up
Bitcoin dominance is up
Mt. Gox Transfers $9 Billion in Bitcoin
Bitcoin Records Best May Since 2019 Despite ‘Predatory’ 3% Price Dip
London Stock Exchange Approves Bitcoin and Ethereum ETP Listings
Argentina Looks to Emulate El Salvador’s Bitcoin Success
Tokyo-Listed Metaplanet to Expand Bitcoin Holdings
Luxor and Bitnomial Launch Bitcoin Mining Derivates
Bitcoin Miners Experience 46.15% Revenue Drop in May, Lowest Since October 2023
New Bitcoin Mining Company Establishes Headquarters in El Salvador
Paraguay Shuts Down 2,700 Illegal Bitcoin Miners in Largest Operation Yet
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Bitcoin Price
Crypto is up this week, with BTC being up 1.3% and ETH down 1.4%:
Bitcoin dominance has increased over the week, rising from 50.3% to a peak of 50.91% and ending at 50.7%. The recent ETH rally has already impacted Bitcoin's market dominance. This shift causes Bitcoin's dominance to increase, a trend observed over the past few days.
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 cryptocurrency market is currently experiencing mixed sentiments as major digital assets such as Bitcoin (BTCUSD) navigate through various levels of support and resistance.
Bitcoin (BTCUSD) Analysis:
Bitcoin remains in a consolidation phase, exhibiting sideways movement between the $67080.00 support and the intraday resistance formed by the EMA50. There's a prevailing anticipation for a resumption of the bearish bias, with the potential to breach the support at $67080.00 and target $65485.00. However, a decisive move above $69880.00 is required to invalidate the current bearish trend scenario.
Expected Trading Range:
Bitcoin (BTCUSD): $66000.00 (support) - $69200.00 (resistance)
Market Outlook:
Investors and traders are advised to closely monitor the critical support and resistance levels outlined for Bitcoin. Sustained movements above or below these levels could dictate the short-term market direction. Caution is warranted, particularly in light of the potential for increased volatility and the need for confirmation of trend reversals before establishing significant positions.
With BTC dominance increasing and the ETH price decreasing less than BTC, the BTC/ETH ratio is trending downwards to 18.25 ETH per BTC.
Financial News
For the first time in over five years, Mt. Gox has moved $9.62 billion worth of Bitcoin, ahead of the October 2024 repayment deadline.
The collapsed cryptocurrency exchange transferred 141,686 Bitcoins into a new wallet, raising hopes among creditors that they may finally get their money back. This large transfer comes from several cold wallets associated with Mt. Gox and is seen as part of the exchange’s plan to repay users by October 31, 2024.
Anndy Lian, a blockchain expert, mentioned that this move is likely part of the plan to distribute the assets back to creditors. Mt. Gox's trustee, Nobuaki Kobayashi, confirmed that the consolidation is a step towards making these repayments, although the exact timing is still unclear.
The current deadline for repayment could face delays, as it was initially set for October 2023. Mt. Gox owes over $9.4 billion worth of Bitcoin to its 127,000 creditors, who have been waiting since the exchange collapsed in 2014 following multiple hacks.
BTC price action sees manipulative moves into the monthly close, with Bitcoin bulls unable to achieve a key resistance flip in time. Bitcoin (BTC) traded at $67,500 on June 1, as last-minute price volatility cost bulls a final shot at key resistance. Despite these challenges, Bitcoin retains 11% monthly gains. Data from Cointelegraph Markets Pro and TradingView showed BTC/USD flat at the monthly close after recovering from weekly lows.
Concerns over a cryptocurrency exchange hack in Japan and "predatory" trader moves ahead of the monthly close contributed to the volatility. United States macroeconomic data, specifically the Personal Consumption Expenditures (PCE) index, narrowly beat expectations but failed to lift the mood substantially, showing inflation slowing.
WisdomTree has gained approval from the Financial Conduct Authority (FCA) to list its Bitcoin and Ethereum exchange-traded products (ETPs) on the London Stock Exchange (LSE). The WisdomTree Physical Bitcoin ETP (WBTC) and the WisdomTree Physical Ethereum ETP (WETH) will be among the first crypto ETPs available in the UK, with an expected listing date of May 28. This development follows the FCA's March approval for crypto listings on UK exchanges, allowing professional investors to access these products for the first time.
However, in the UK, crypto exchange-traded notes (ETNs) will be available exclusively to professional investors, with retail access still prohibited. To be listed on the LSE, crypto ETNs must be physically backed, non-leveraged, and provide exposure only to Bitcoin or Ethereum.
Adoption News
The Argentine government is collaborating with El Salvador to understand their experience with Bitcoin adoption and other crypto activities. Argentina’s National Securities Commission (CNV) had a meeting with El Salvador’s National Commission of Digital Assets (CNAD) to discuss how both countries handle cryptocurrency use and regulation, as announced by the CNV.
On May 23, CNV president Roberto Silva, CNV vice president Patricia Boedo, and CNAD president Juan Carlos Reyes talked about El Salvador's journey as the first country to make Bitcoin legal currency in September 2021. The officials shared their approaches and ideas on using cryptocurrencies in the global economy, focusing particularly on El Salvador's Bitcoin adoption.
Silva pointed out that El Salvador is not only a leader in adopting Bitcoin but also successful in the overall cryptocurrency industry. He emphasized the importance of the insights gained by CNAD, which regulates the digital asset market in El Salvador. Silva said: “We want to strengthen our relationship with El Salvador, and we are considering signing collaboration agreements with them.”
Japanese company Metaplanet Inc has announced plans to buy more Bitcoin as part of its bullish strategy. The company decided to spend ¥250 million (about $1.59 million) to add to its Bitcoin holdings. Currently, Bitcoin's price is around $68,000 after a slight dip from $71,000.
On May 28, Metaplanet disclosed to investors its plan to buy more Bitcoin and update its accounting strategies. This new purchase adds to their existing 117.7 BTC, which they bought at an average price of ¥10,193,536 each.
For long-term holdings, Metaplanet will value Bitcoin at its purchase cost. For short-term holdings, they will revalue it quarterly based on market prices. Any gains or losses will be reported as non-operational income, with significant impacts on quarterly earnings disclosed promptly.
This new acquisition follows a previous purchase of ¥200 million worth of Bitcoin (about $1.25 million). Inspired by Michael Saylor’s MicroStrategy, Metaplanet aims to increase its Bitcoin holdings to $6.25 million, as announced in April. The company sees this investment as a symbol of innovation and adaptability in financial markets.
Luxor Technology Corporation and Bitnomial Inc. have introduced a new Bitcoin mining derivative product on Bitnomial’s U.S. derivatives exchange. This product, called Hashrate Futures, allows investors to speculate on future Bitcoin mining power and potential revenue.
What Are Hashrate Futures? Hashrate Futures are a type of financial contract that lets investors trade Bitcoin’s computing power. These contracts, known under the ticker HUP, give miners a way to hedge their revenue and allow investors to gain exposure to Bitcoin mining.
Key Features:
Futures Contract: An agreement to buy or sell Bitcoin’s computing power at a future date for a set price.
Hashrate Trading: Trades Bitcoin’s computing power, known as the hash rate.
Hashprice Index: Uses Luxor’s Bitcoin Hashprice Index to determine the contract’s value.
Contract Size: Each Hashrate Futures contract represents 1 petahash (PH) and has a monthly duration.
Luxor also provides non-deliverable Hashrate Forwards, which are traded over-the-counter and do not settle on a Commodity Futures Trading Commission-regulated exchange.
This new product offers a novel way for investors to engage with the Bitcoin mining industry, while providing miners with tools to manage their financial risk.
Mining News
Bitcoin miners saw a drastic decline in earnings in May, marking the lowest revenue since October 2023 following two months of record-breaking profits. In April, miners raked in $1.79 billion, but May saw a sharp decrease to approximately $964.24 million.
Significant Decline in Bitcoin Miner Revenue Data reveals that Bitcoin miners earned 46.15% less revenue in May compared to April. Their earnings totaled $964.24 million, with onchain fees amounting to $64.85 million, a stark contrast to April's $281.47 million.
This downturn in revenue, the lowest since October 2023 when earnings were $864 million, occurred despite the discovery of 4,281 blocks in May. Foundry USA led the way with 1,243 blocks, representing over 29% of the total, while Antpool followed closely behind with 1,117 blocks, or 26.09% of the total.
El Salvador's appeal to businesses and global brands continues to rise as Bitcoin mining company OCEAN announces its strategic decision to set up its global headquarters in the country. This move not only positions OCEAN for international success but also highlights El Salvador's potential as a center for pioneering Bitcoin-related business activities.
According to their announcement, El Salvador will serve as the "global hub of business development" for OCEAN. As a Bitcoin mining pool operator, OCEAN allows miners to combine their hashpower, increasing their chances of receiving the block reward and earning more Bitcoin. This setup enables miners to join OCEAN with their equipment, enhancing their profitability while operating their devices.
In a significant move against illegal bitcoin mining, Paraguayan authorities took action on May 28 in Saltos de Guaira. The operation, led by the Paraguayan National Power Administration (ANDE) and local prosecutors, targeted and shut down a massive bitcoin mining farm housing 2,738 miners.
The farm had been illicitly drawing power from the electric grid, bypassing the connection to the electric meter, effectively evading detection by ANDE. Alongside the miners, authorities seized five electric transformers with a combined capacity of 7,150 kilo-volt-amperes.
The detection of this illegal operation was made possible through various techniques, including the use of supervisory and control systems (SCADA) and artificial intelligence (AI) software to monitor unusual load current peaks.
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