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      • Secure Digital Markets Inc (SDM) is a leading global digital asset trading, marketing making, and treasury management firm with an MSB license that provides boutique financial services to small medium and large capital management groups, payments and forex corporations and other financial institutions, governments and individuals. SDM was founded in 2017, is headquartered in Toronto and New York City with partners and representatives in financial centers around the world.

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      • Secure Digital Markets is committed to providing cutting edge trading solutions to financial institutions and global liquidity to digital asset issuers with a mission of making blockchains and digital assets mainstream. SDM is a specialized digital asset trading firm within GDA Capital Corporation, a diversified capital markets firm with operations around the world.

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      • Secure Digital Markets serves institutional clients across the blockchain industry including miners of bitcoin and alternative digital currencies, capital markets institutions, active traders, exchanges, BTM Networks, and high net worth individuals.

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      • Our people share in our mission of advancing the digital asset and blockchain industry by providing access to global liquidity and market making strategies for digital asset issuers and boutique digital asset trading strategies for capital management firms and other financial institutions.

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to the moon

Bitcoin to the Moon? Broker’s Beat Issue #3

Welcome to the third issue of our recently unveiled newsletter, ‘The Broker’s Beat’. 

This week, we talked about what the recent pump in Bitcoin means and how miners will be affected. There are some nuances to this new bull run that needed to be pointed out, and we go through it all inside this week’s newsletter!

Ethereum’s Adoption Rate After 5 Years Far Exceeds Bitcoin’s

Source: CoinTelegraph

“In the first 600 days, the growth rate for both networks is quite similar. By mid-2017, however, Ethereum’s curve became much steeper. The most obvious explanation is the ICO boom. The creation of thousands of ERC20 tokens and their subsequent distribution and trading led to a much greater rate of Ethereum address creation.”

Gold trading volumes surge on cryptocurrency markets

Source: Decrypt

“While the US has announced further economic stimulus and the price of the US dollar has declined, the prices of gold and Bitcoin have both risen. Gold is up 11% in July, while Bitcoin has shot up 20%.

Bitcoin bull Anthony Pompliano and Gold bug Peter Schiff took part in a debate yesterday, each arguing that their chosen asset was the answer to growing global financial uncertainty. The only thing they agreed on was that the US dollar is potentially falling into an abyss. ”

 Real Custody Means Higher Crypto Trading Volumes

Source: Trader’s Magazine

“National banks can provide cryptocurrency custody services for customers, according to the Office of the Comptroller of the Currency (OCC). 

“I think it’s one of the biggest announcements in the history of crypto,” says Rosario Ingargiola, chairman and chief executive of system provider Bosonic. ‘It’s a clarification, but the banks being conservative did not read between the lines in that grey area – they wanted a clarification. The big banks have been in the background preparing for this day.’”

The Coronavirus Cryptocurrency Craze: Who’s Behind The Bitcoin Buying Binge?

Source: Forbes

“A new study from Cornerstone Advisors revealed that 15% of American adults now own some form of cryptocurrency—a little more than half of whom invested in cryptocurrency for the first time during the first six months of 2020.

Price Analysis

Last Week in the Broker’s Beat, we were optimistic but still neutral on Bitcoin. The same patterns had been repeating for a few weeks and there was no sign of it ending. 

A whole lot has changed since then. Bitcoin finally closed past the $10k mark, tested the $11.3k resistance level, and is now hovering around $11k. Many think that this is the beginning of the next “big” bull run for Bitcoin. It echoes some of the conditions from late 2017 and the fundamentals are there. However, this is actually a big improvement over those times, as Cameron Winklevoss of Gemini points out: 

“The next Bitcoin bull run will be dramatically different. Today, there’s exponentially more capital, human capital, infrastructure, and high-quality projects than in 2017. Not to mention the very real specter of inflation that all fiat regimes face going forward. Buckle up!”On a technical level, you can see Bitcoin gaining some stability around $11,200 and continuing to test $11,300. The fatigue within the markets has clearly lessened since last week. 

The relative strength index is running pretty much in the middle of the 40-60 range, which suggests some stability here as well. 

Mining Dominance

Last week we touched on the overall breakdown of hash rate between major miners, but this missed some much-needed nuance to the point. As we discussed centralization within the mining community, we should have gone deeper into the consolidation trend. 

Below is a chart from BTC.com that shows it better. You can see how “Other” is shrinking as a category. On the other hand, Binance Pool and Lubian.com have grown enough to be separated from “Other”. Altogether, they would control the same amount of hash rate as a year ago, but the trend is still towards fewer small miners and more big miners. Essentially, unknown miners are shrinking. 

to the moon

Hash Rate Analysis

Last week we touched on the overall breakdown of hash rate between major miners, but this missed some much-needed nuance to the point. As we discussed centralization within the mining community, we should have gone deeper into the consolidation trend. 

Below is a chart from BTC.com that shows it better. You can see how “Other” is shrinking as a category. On the other hand, Binance Pool and Lubian.com have grown enough to be separated from “Other”. Altogether, they would control the same amount of hash rate as a year ago, but the trend is still towards fewer small miners and more big miners. Essentially, unknown miners are shrinking. 

bitcoin hash rate

What’s interesting about the chart below is how it shows the year-long trend of miner revenue dropping. Miners have been getting killed for the last year and this new pump has spiked their income significantly. 

mining revenue
trader's digest

On a macro-scale, not a lot has occurred in terms of liquidity and trading since last week.

Bitcoin’s pump seems to have outraced the rest of the market, as its’ market cap dominance increased from 62.33% to 63.19%. However, considering it went up by more than 10%, this means altcoins have directionally done quite well in this trend. 

WE can expect fewer miners to be hoarding coins going forward, which will likely bring some balance to the market. 

But on a more micro-scale was the announcement that Paysafe Group would be using Kraken for their liquidity. The US-based group will be giving Paysafe clients the ability to buy and sell crypto through Skrill and Neteller. 

Skrill users used to have to sell their crypto in order to purchase crypto, but the Kraken partnership will end that. Over the long-term, this type of liquidity partnership will occur more and more while banks try to keep up with retail appetite, especially from millennials. 

That concludes the third issue of the Broker’s Beat. Tomorrow we’re publishing our analysis of the potential Coinbase IPO. Watch out for this high-value report in your inbox. You won’t want to miss it!

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