Welcome to the 54th issue of the Broker’s Beat. This week, we’ve got bullish news coming from a few sources. Hash rate is improving, the Dogecoin foundation got reestablished with Vitalik and Elon at the wheel, and PayPal has enabled crypto services for UK verified accounts.
BY THE NUMBERS
“Bitcoin’s network difficulty, a measurement of the challenges presented to those mining bitcoin just got more difficult, as the network saw a 13% increase — the second largest of the year — as miners continue to relocate machines outside of China in the wake of its recent mining ban.”
“Cryptocurrency technology development company amid global supply shortage, the move could impact clients such as mining rig maker Bitmain, which sources TSMC’s wafers for its Antminer S19 series.”
“Of the 5,600 new crypto mining machines that were purchased by Powerbridge Technologies, 2,000 will be for bitcoin with the remaining 3,600 reserved for Ethereum.”
Source: The Daily Hodl
“Spain’s National Police say they have dismantled an alleged illegal cryptocurrency mining operation that was being run from a residential property.”
“An Afghan refugee who had planned to start a crypto mining business has been arrested in Turkey after illegally crossing the border.”
THE BITCOIN BEAT
A snapshot of Bitcoin’s spot price as of this writing is $47,805.18 representing 8.51% increase in the last seven days and 13.29% increase in trading volume. The 30-day volatility of BTC is 53.14%. Bitcoin remains the top cryptocurrency trading with a support at $45,300 and resistance at $51,500.
ETH is trading at $3,152.25 as of this writing, representing a 24-Hour decrease of 2.09%, and 30-day volatility of 64.53%. Over the last 24 Hours, the trading volume increased by 2.20%. As of today, ETH holds 19.84 % of the cryptocurrency market, making it the second-largest coin traded.
The overall flow of Bitcoin during this week reveals that there is less supply of BTC volume for trade on the spot exchanges wallets. Instead, there is an increased volume of BTC in the external wallets. Here are the charts proving this as shown below:
The chart above shows the value of BTC inflow across all exchanges. As we can see, there was a decrease in its value from 46.5k BTC on August 23rd to 30k BTC on August 25th. Because less amount was transferred into exchanges wallets from external sources, consequently there will be a reduced amount of Bitcoin available for selling, spot trading and margin/futures trading.
The chart above is the total exchanges outflow of BTC. By studying the chart, we see that there was an increase in Bitcoin outflow across all exchanges from 29k on August 23rd to 52k on August 25th. With this, there will be a decrease in the selling pressure of BTC and more available for long term storage in external wallets.
We see a similar trend when we study the netflow chart shown above. There was a negative shift in the total netflow of Bitcoin across all exchanges, giving a value of -22k BTC on August 25th. This negative netflow value validates that outflow is greater than inflow.
Hashrate has now made a major recovery since it pummeled following the China mining crackdown that led to the exodus of many miners from major mining operations in several China provinces. These miners have sought for greener mining operations in other places including the United States, Russia and Kazakhstan.
The average computing power in the Bitcoin network had reached a significantly low value of 84.7m Tera Hashes per second on July 2, 2021 after the China crypto mining ban was announced. As of today July 26, 2021, the average hashrate sits at 127.2m TH/s, implying that migration of miners will soon be complete and an increase in difficulty.
It should be noted that China’s contribution to the global hashpower on the Bitcoin network has reduced to about 46% since the mining crackdown event occurred. China is no longer a crypto-friendly country and has banned crypto mining.
The bull traders strongly believe that the bull cycle is still in full play and many bear traders are willing to argue that it is only a dead cat bounce and we will soon begin to see the crypto market crashing. However, with Bitcoin hitting the 50k mark earlier this week and the myriad of positive fundamentals happening within the crypto space right now, we can only but slightly steer towards the fact that we may indeed see many green days ahead.
The Dogecoin foundation, a nonprofit organization founded in 2014, has now been reestablished. It’s advisory board features prominent crypto personalities including Ethereum founder Vitalik Buterin as well as the Doge father himself–Elon Musk. This looks like positive news for the tokenomics of Dogecoin. The Dogecoin foundation has published its roadmap and four tenets as laid out in its manifesto. Will Dogecoin be more than just a meme coin going forward?
Crypto Non-fungible Tokens (NFTs) have exploded recently and they are starting to gain the attention of the media with celebrities starting to get involved in the NFT space. There is a surge in the volume of many NFT projects following the announcement of Visa on August 24th that they purchased a crypto punk NFT around $150,000. We expect an even bigger surge in Crypto NFT volume in September 2021.
PayPal has now launched crypto services for its customers who own a verified account in the UK. Since the finance company first launched its crypto offerings in the US in November 2020, it has now expanded its reach to allow UK PayPal owners to have access to cryptocurrencies like Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, and Litecoin LTC. This will encourage mass adoption of cryptocurrencies among other companies and also individual customers who have verified PayPal accounts.
That’s all for this week! If you have any questions about what we talked about here or would like to explore trading with us, please reach out here.
The Secure Digital Markets Team