Bitcoin Newsletter Week 24 2024

Weekly update on all things Bitcoin

June 18, 2024

TL;DR

  • BTC is down

  • Bitcoin dominance is down

  • MetaPlanet Acquires ¥250 Million More in Bitcoin

  • Bitcoin ETFs Drive Market Optimism with Record Inflows

  • MicroStrategy Increases Stock Sale to $700M for Bitcoin Acquisition

  • Itaú, Brazil's Largest Bank, Launches Bitcoin and Crypto Trading

  • NiceHash and Marathon Launch New Mining Firmware

  • Hidden Road Joins Bitfinex Amid Bybit KYC Challenges

  • Trump Urges US-Based Bitcoin Mining

  • Bitcoin Miners Face Squeeze as Transaction Fees Plummet

  • Bitdeer Unveils Energy-Efficient Bitcoin Mining Chip

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Bitcoin Price

Crypto is down this week, with BTC being down 4.7% and ETH down 4.2%:

Bitcoin dominance has decreased by 0.27% over the week, rising from 51.16% to a peak of 52.12% and ending at 51.7%. The recent ETH rally has already impacted Bitcoin's market dominance. This shift causes Bitcoin's dominance to decrease, 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 experienced notable volatility recently, influenced primarily by macroeconomic factors and investor sentiment. On Thursday, June 13, Bitcoin (BTC) slid by 2.22%, closing at $66,787. This decline comes amid concerns over the Federal Reserve's more hawkish economic projections, despite weaker-than-expected US producer prices for May.

Bitcoin (BTCUSD) Analysis:

Bitcoin (BTC.CPT) closed at 66,225.00 USD on June 15, 2024, reflecting a decrease of 518.59 USD. In the short term, Bitcoin has broken through a rising trend channel and is signaling potential further decline towards support levels around 62,000 USD. Similarly, the medium-term outlook remains negative as Bitcoin struggles with resistance near 71,000 USD, compounded by a declining RSI trend. However, in the long term, Bitcoin's technical stance is neutral, with the cryptocurrency testing resistance at 70,000 USD, presenting a pivotal point for future price action.

Expected Trading Ranges:

  • Bitcoin (BTCUSD): $62000 (support) - $71000 (resistance)

Market Outlook:

Over the past week, Bitcoin (BTC.CPT) has declined to 66,225.00 USD, down 518.59 USD. The short-term outlook is bearish, with Bitcoin breaking its rising trend channel and potentially falling towards 62,000 USD support. Medium-term indicators also show resistance at 71,000 USD and a declining RSI, suggesting continued pressure. Long-term prospects are neutral, with critical resistance at 70,000 USD. Investors should watch the 62,000 USD support and 71,000 USD resistance levels for market direction, as current signals point to a cautious trading environment.

BTC/ETH ratio has seen a slight decrease.

Over the last 6 days, the BTC to ETH conversion rate has experienced fluctuations. Starting from 18.96 ETH on June 10, 2024, the rate increased to 19.25 ETH on June 11, before gradually decreasing to 18.73 ETH on June 15. This indicates a general decrease in the BTC to ETH conversion rate over the specified period. Despite daily fluctuations, the overall trend shows a decline in the value of Ethereum relative to Bitcoin in the past week.

Financial News

Japanese hotel and services provider Metaplanet announced on X that it purchased an additional ¥250 million ($1.8 million) worth of Bitcoin. This purchase aligns with Metaplanet's strategy of accumulating Bitcoin, similar to MicroStrategy's approach.

As of June 11, Metaplanet holds around 141 Bitcoin, acquired for ¥1.45 billion at an average price of ¥10,278,391 ($65,000) per Bitcoin. The company adopted Bitcoin as its treasury reserve asset in April 2024, starting with an initial ¥1 billion purchase and has continued to buy more since then.

Bitcoin Exchange Traded Funds (ETFs) in the United States have made headlines by absorbing substantial amounts of bitcoin, igniting optimism across the market.

During the first week of June, US spot Bitcoin ETFs accumulated nearly two months' worth of Bitcoin mining supply. Specifically, these funds acquired approximately 25,729 bitcoin between June 3 and June 7. This figure dwarfs the 3,150 BTC mined during the same period, according to data from HODL15Capital.

The total inflow into these ETFs amounted to $1.83 billion for the week, highlighting the robust investor interest in these financial instruments.

MicroStrategy, the American software technology firm, has announced an upsized convertible senior notes offering amounting to $700 million. The proceeds from this offering, which matures in 2032, will primarily be allocated towards purchasing additional Bitcoin and for general corporate purposes.

In a press release, MicroStrategy disclosed that the notes will be offered privately to qualified institutional buyers under Rule 144A of the Securities Act of 1933. This upsizing from the initially planned $500 million underscores the company's strategic commitment to expanding its Bitcoin holdings.

Adoption News

Itaú Unibanco, the largest bank in Brazil and Latin America, has launched Bitcoin and crypto trading through its investment app, Ion. Initially available only to select clients in December 2023, the app now allows all users to buy and sell Bitcoin and Ethereum.

According to Itaú's digital assets head, Guto Antunes, the expansion was driven by strong demand from initial users in weekly surveys. Although specific user numbers weren't disclosed, the Ion app has been downloaded over 3.5 million times, indicating significant interest in crypto trading in Brazil.

Itaú developed its own custody solution for client wallets instead of using third parties, providing each user with a separate wallet for asset segregation. As the country's largest bank, Itaú's move into Bitcoin trading is expected to boost mainstream adoption, positioning the bank as a preferred gateway for Brazilians entering the crypto market.

NiceHash, a prominent marketplace for Bitcoin hashing power, has teamed up with Marathon Digital Holdings to launch specialized firmware for ASIC miners available on its platform.

The newly introduced product, called NiceHash Firmware, incorporates Marathon's technology to optimize the performance and profitability of Bitcoin miners utilizing ASIC devices. Miners adopting this firmware can benefit from a competitive fee structure starting at 2%, which decreases to 1.4% when using NiceHash as their primary mining pool.

NiceHash Firmware aims to maximize miners' earnings by incentivizing the sale of surplus hashing power through its marketplace and enhancing the efficiency of ASIC machines.

Hidden Road, a prime brokerage supported by Citadel Securities, is expanding institutional access to digital assets through a partnership with Bitfinex.

Bitfinex announced on June 13 that it is integrating with Hidden Road, enhancing the brokerage's institutional offerings with new digital assets and security tools.

Through this collaboration, Bitfinex will assist Hidden Road in expanding or launching services such as derivatives trading, spot trading, peer-to-peer lending, over-the-counter (OTC) trading, margin trading, and more.

Bitfinex, the cryptocurrency exchange, is owned by iFinex, which also operates Tether, the issuer of the world's largest stablecoin, Tether (USDT). Paolo Ardoino, CEO of Tether, also serves as the Chief Technology Officer (CTO) at Bitfinex.

Mining News

Donald Trump reiterated his support for the Bitcoin mining industry after meeting with executives from U.S. crypto mining firms on Wednesday. In a June 11 post on his Truth Social platform, Trump emphasized his desire for “all the remaining Bitcoin to be MADE IN THE USA!!!” He claimed this would help the country achieve “energy dominance.”

Trump also argued that Bitcoin was the country’s “last line of defense” against a central bank digital currency (CBDC), despite Federal Reserve Chair Jerome Powell stating in March that the U.S. was “nowhere near recommending or adopting a CBDC.” The meeting at Trump’s Mar-a-Lago residence in Florida included Riot Platforms CEO Jason Les, public policy head Brian Morgenstern, CleanSpark executive chairman Matthew Schultz, and TeraWulf board member Amanda Fabiano, according to posts on X.

In the wake of the recent Bitcoin halving, miners are experiencing a significant revenue squeeze. Daily transaction fees have plummeted to around 65 Bitcoin, a stark drop from the 117 Bitcoin seen prior to April 18th. This is occurring despite a record number of transactions, highlighting the mounting pressure on miners' incomes.

Following the halving, the Bitcoin network hashrate has seen a slight dip of 4%, from 622 EH/s to 599 EH/s. While this decrease is modest, the competition among miners remains intense due to the relatively high hashrate, exacerbating the challenges they face as they vie for reduced block rewards.

Periods of low miner revenues coupled with a high hashrate often indicate potential market lows. Since May, miners have been underpaid significantly, suggesting the market might be nearing a price bottom.

Bitdeer Technologies, a prominent blockchain and high-performance computing firm based in Singapore, has introduced the SEAL04 chip, a new innovation aimed at drastically reducing energy consumption in Bitcoin mining. Set for mass production by Q4 2025, this chip is poised to make a substantial impact on the industry.

The SEAL04 chip represents Bitdeer’s ongoing commitment to enhancing the efficiency and sustainability of Bitcoin mining. Linghui Kong, the company’s Chief Business Officer, highlighted the strategic importance of this development, stating:

“Bitdeer has a long-term commitment towards enhancing transparency in our industry. We believe that the financial models of Bitcoin miners are significantly impacted by price uncertainty.”

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