Welcome to the 63rd issue of the Broker’s Beat. This week, we analyze Bitcoin’s dominance in the crypto cap and outline how the ETF launch brought the price to this level.
BY THE NUMBERS
Source: AMB Crypto
“A hopeful miner trying to strike gold with Bitcoin mining needs to consider the cost of electricity in the location where they plan to start mining. A lot of miners don’t have that luxury of choice, but the question is – If one did, where would they go?”
“United States-based crypto mining company Marathon Digital Holdings holds more than $460 million in Bitcoin (BTC), mainly from mining and purchases since last year.”
“The mining company is a Bitcoin mining company that builds and operates data center and electrical infrastructure for the mining of bitcoin using renewable energy sources. Iris energy will list on the Nasdaq under the ticker IREN. The company confidentially submitted a draft registration statement on Form F-1 with the U.S. SEC in late August 2021.“
Source: The Block
“U.S. Bitcoin mining firms are experiencing delays for their equipment on order from China amid a global supply chain crisis.“
“According to an article shared by Chinese crypto journalist Colin Wu, five days ago, on Oct. 28, an inspection in the city of Dongguan (located in China’s Guangdong Province) accidentally found out that a company that recycles computers and graphics cards was mining cryptocurrencies in subleased factories.”
Just as we predicted last week, the price of BTC witnessed a sharp improvement from what was recorded last week. While Bitcoin dropped from $62.2k on Oct.21, 2021, to $58.45 on Oct. 27, 2021, this week showed more promise as the price of Bitcoin was pegged at $62.93k on Nov 3, 2021. However, during the week in review, the spot price of Bitcoin peaked at $63.26k, on Oct. 2, 2021 before dropping slightly to its current price of $62.93k One upcoming event that has the potential to influence the spot price of BTC is Bitcoin Futures ETF. We shall discuss its possible effect on Bitcoin as we approach the end of 2022.
As the current spot price of Bitcoin increased from $58.45k on Oct. 27, 2021, to $62.93k on Nov 3, 2021, it shows the strength of the cryptocurrency and proves that we may expect Bitcoin to attain new price levels. Let us analyze Bitcoin Netflow in the charts below.
Let us analyze the Bitcoin reserves chart for all exchanges as shown above. The chart indicates a slight decrease in the value of BTC reserves from 2.33M to 2.31M between Oct. 27, 2021, and Nov. 3, 2021. A drop in the Bitcoin reserve value across all exchangers indicates a decrease in BTC supply for trading. The minor decrease suggests that the volume of available altcoins for processing was less compared to last week. The overall effect of the Bitcoin reserves chart for all exchanges shows that exchangers had fewer BTC in their wallets compared to the previous week
The Bitcoin NetFlow chart for all exchanges for this week in review shows a massive drop in the Bitcoin Netflow value from 11.M on Oct. 27, 2021, to -2.92M on Nov. 3, 2021. The shift from a positive to a negative value shows that the outflow of Bitcoin is greater than Bitcoin Inflow for this week. The large margin from 11.1 to -2.92 indicates a significant decrease in the supply of bitcoin for the sale and purchase of altcoins.
A critical analysis of the Bitcoin outflow chart for all exchanges indicates an increase in the Bitcoin outflow value from 34.7K on Oct. 27, 2021, to 37.3k on Nov. 2, 2021. The slight increase in the value of bitcoin outflow suggests an increase in the amount of bitcoin transferred from exchangers wallets to other external hardware wallets. It also indicates a decrease in the selling pressure of bitcoin between Oct. 27, 2021, to Nov. 3, 2021.
As usual, the Bitcoin mining hash rate is used to determine the attack resistance level and security of Bitcoin. The bitcoin hash rate value increased from 154.74 TH/s on Oct. 27, 2021, to 157.79 TH/s on Nov. 3, 2021. The increase in the hash rate value for this week shows an increase in Bitcoin mining security.
It also shows that Bitcoin has a higher attack resistance level compared to last week. China’s cryptocurrency ban may have turned out to be a blessing in disguise as we witness improvement in cryptocurrency decentralization. We predict a further rise in the bitcoin hash rate value as we approach the end of the year.
The above chart indicates the Bitcoin all miners outflow value. It is a summary of the behavior of bitcoin miners after the ban on cryptocurrency in China. The chart above shows that there has been little change in miners’ behavior since the ban came into effect in May 2021.
However, there has been a slight reduction in the bitcoin all miners outflow value from 1.93k to 1.41k between Oct. 27, 2021, and Nov. 3, 2021. The reduction in the value of Bitcoin in all miners outflow is an indication that less BTC amount was transferred from Bitcoin miners’ wallets. It clearly shows that bitcoin miners prefer to withhold their bitcoin rewards.
Cryptocurrency witnessed a sharp increase this week after it fell $62.20k on Oct. 21, 2021, to $58.45k on Oct. 27, 201. We had predicted a rise in its value for this week, and as of Nov. 3, 2021, the spot price of Bitcoin was pegged at $62.93k. Let us analyze some of the significant crypto news that may have contributed to the rise in cryptocurrency for this week.
The ETF approval and the subsequent ETF launch play a substantial role in getting Bitcoin’s spot price to its current level. The news has brought about a positive impact on the price of Bitcoin. One other news that may impact positively on bitcoin’s performance is the indication made by the federal deposit insurance commission (FDIC) that it is working on setting up clear guidance on the connection between the US and cryptocurrency.
Bitcoin futures Proshares acceptance may see a rise in the general acceptance and adoption of bitcoin. We witnessed the launching of the Proshares ETF last week, and its market performance was phenomenal. The crypto community was also excited to witness the launching of Valkyne’s bitcoin futures ETF. The launching of these two corporate giants played an impact on today’s bitcoin spot price.
We are optimistic that the Vaneck bitcoin futures ETF will also launch after being rejected by the United States Securities and Exchange Commission. If the Vaneck bitcoin futures ETF launch pulls through, Wall Street will have three bitcoin-related ETFs. We are also anticipating the inclusion of Melanion BTC Equities Universe UCITS ETF, which an investment firm in France owns.
The total crypto capitalization for today is $2.3 trillion, and Bitcoin-like before has dominated the crypto market with about 46.7% cap at 1.1 trillion. Today’s Bitcoin price of $62.93k explains Bitcoin price dominance over other cryptocurrencies. Ethereum contributed 16% of the total crypto market capitalization with a current price of $4,504 as of Nov. 3, 2021.
The current market capitalization of Ethereum was pegged at 537.7 billion. As we approach the end of the year, experts predict a further increase in the spot price of Bitcoin. With the new year around the corner, the crypto community is expecting more big players to launch more Bitcoin Futures ETF to strengthen the price of Bitcoin further.
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, let’s get the conversation started.
The Secure Digital Markets Team