News On Bitcoin - Week 28 2024

Weekly update on all things Bitcoin

July 16, 2024

TL;DR

  • BTC is down

  • Bitcoin dominance is down

  • Asia's MicroStrategy Metaplanet Acquires ¥400M in Bitcoin

  • German Government's $354M BTC Sell-Off Sparks Volatility

  • Bitcoin ETFs Surge Despite Price Dip

  • Trump to Speak at Bitcoin Conference

  • Australia's ASX Approves Second Bitcoin ETF

  • Bitcoin Network Stacks Avoids SEC Charges

  • Block and Core Scientific Partner on Advanced Bitcoin ASICs

  • UK Advocates Bitcoin Mining for Renewable Energy

  • TeraWulf Clears Debt Early to Focus on Growth

Bitcoin Price

Crypto is down this week, with BTC being down 1.6% and ETH down 1.7%:

Bitcoin dominance has decreased over the week, rising from 51.5% to a peak of 52.25% and ending at 51.2%. Bitcoin keeps losing its dominance, so it's mostly Bitcoin driving the Crypto market lower while some of the ALTcoins are holding up well.

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 Ethereum (ETHUSD) and Bitcoin (BTCUSD) navigate through various levels of support and resistance.

Bitcoin Analysis: Bitcoin is currently in a falling trend channel, indicating negative development with support at 55,200 and resistance at 60,700. Recently breaking through a rising trend channel floor, Bitcoin suggests slower or horizontal development, potentially declining to 46,249 or lower. Historically, in a rising trend channel, Bitcoin recently broke down through support at 67,000, signalling a further decline.

Expected Trading Ranges: Support at 55,200, Resistance at 60,700.

Market Outlook

Bitcoin presents a negative outlook in the short and long terms, with the medium term being neutral but cautious. Key support levels at 55,200 and resistance at 60,700 should be closely monitored. The overall sentiment is bearish, with technical indicators pointing to sustained downward pressure. Investors should remain vigilant, especially around critical support and resistance levels, to anticipate potential market movements.

BTC/ETH ratio has seen a decrease.

Over the last six days, the BTC to ETH conversion rate has experienced fluctuations. Starting at 18.57 ETH per BTC on July 4th, the rate saw minor changes with a peak of 19.07 ETH on July 7th before settling at 18.48 ETH on July 11th. This reflects a decrease overall, with notable daily fluctuations such as a peak increase of 2.31% on July 5th followed by subsequent decreases, resulting in a net decrease of 0.09 ETH over the period.

Financial News

Japanese company Metaplanet purchased another ¥400 million ($2.5 million) in Bitcoin on July 8th, continuing its strategy of using Bitcoin as a treasury reserve asset. This acquisition of 42.466 Bitcoin brings Metaplanet's total holdings to around 203 Bitcoin, valued at ¥2.05 billion ($12.7 million). Despite Bitcoin market fluctuations, Metaplanet remains committed to this strategy, similar to U.S.-based MicroStrategy.

By adopting Bitcoin, Metaplanet aims to hedge against the weakening yen and provide domestic investors access to Bitcoin through a public firm. The yen's dramatic decline in 2022 has prompted this approach, positioning Metaplanet to benefit from future Bitcoin adoption.

The German government has initiated another round of Bitcoin sell-offs, moving 6,000 BTC worth $354 million to various exchanges. This follows a recent sale of 3,100 BTC and reflects ongoing efforts to liquidate seized funds from illegal activities linked to Movie2k.

Despite these substantial sales totaling over $1 billion, Bitcoin's price has shown resilience, rebounding to around $58,000 after dipping to $53,900. Questions linger about the efficiency of Germany's sales strategy, with experts suggesting auctions or OTC deals might offer better outcomes amidst concerns over market stability and Bitcoin's role as a global asset.

Bitcoin ETFs saw record inflows of $295 million on July 8, indicating strong institutional confidence despite recent price declines. Major ETFs like BlackRock’s iShares Bitcoin Trust led the surge, with inflows of $187.2 million. This influx occurred even as Bitcoin’s price fell to $53,600, highlighting a strategic buying opportunity perceived by investors. The trend continued on July 9, with another $216 million added to these funds.

Despite market anxieties, including a significant sell-off by the German government and concerns about Mt. Gox repayments, institutional investors remain bullish. Analysts suggest these inflows are stabilizing Bitcoin’s price, which rose to $58,413. The continued investment in Bitcoin ETFs, seen as a safe haven amid volatility, signals a strong belief in Bitcoin’s long-term potential.

Adoption News

Former U.S. President Donald Trump will speak at the upcoming Bitcoin Conference in Nashville later this month, joining independent candidate Robert F. Kennedy Jr. This move is part of Trump's campaign strategy to engage crypto voters ahead of the November election. Trump, who recently started accepting crypto donations, aims to convert Bitcoin enthusiasts into his supporters.

The conference, running from July 25-27, will also feature keynotes from Michael Saylor and Edward Snowden, with Kennedy participating in a fireside chat. Trump's participation highlights his shift towards supporting Bitcoin, aligning with the Republican Party's stance against the current administration's crypto policies.

Australia's leading stock exchange, the ASX, has approved DigitalX to launch a spot Bitcoin ETF, set to trade under the ticker BTXX on July 12th. This follows the recent approval of the VanEck Bitcoin ETF in June and the Monochrome Bitcoin ETF in April, signaling increasing demand for regulated Bitcoin investment vehicles in Australia.

These developments reflect a growing trend among investors seeking Bitcoin exposure through ETFs rather than direct ownership. The ASX's approval marks a positive shift in attitudes towards Bitcoin assets, aligning with global regulatory acceptance and the successful launch of Bitcoin ETFs in the U.S. earlier this year.

The SEC has concluded its investigation into the Bitcoin scaling network Stacks and its developer, Hiro Systems, with no enforcement action recommended. The investigation, which began in 2021 despite Stacks’ claims of regulatory compliance, ended on July 9, 2024. Hiro Systems celebrated this outcome, emphasizing their commitment to regulatory compliance and innovation on Bitcoin.

This development follows a similar resolution for Paxos, a stablecoin issuer, whose SEC investigation into its BUSD stablecoin also concluded without enforcement action. Despite the positive outcomes, such investigations are costly and invasive, highlighting the ongoing regulatory challenges faced by crypto firms.

Mining News

Block, Inc. and Core Scientific have partnered to decentralize Bitcoin mining using Block's advanced 3 nanometer (3nm) ASIC chips. Core Scientific, a leader in Bitcoin mining, will integrate these cutting-edge ASICs, which offer about 15 EH/s of hashrate, into their large-scale operations. This collaboration is a significant industry milestone, enhancing operational efficiency and sustainability.

The partnership focuses on creating a modular mining platform to optimize resources and simplify infrastructure demands. The initiative, co-designed with ePIC Blockchain Technologies, aims to increase the decentralization, transparency, and resiliency of the Bitcoin network, supporting significant hashrate growth and providing new miner options for the industry.

Bitcoin Policy UK advocates leveraging Bitcoin mining to support renewable energy grids in the UK, addressing local electricity demand. A July 10 report highlights Bitcoin mining’s potential to monetize excess renewable energy, making it a viable and robust solution for sustainable power.

The report argues that Bitcoin mining can provide a flexible, zero-subsidy demand for spare renewable energy, preventing waste and reducing the need for government payments. With the new Labour government and its green energy ambitions, Bitcoin Policy UK is pushing for policies that incorporate Bitcoin mining into the national energy strategy. They argue this approach could stabilize renewable energy projects, ensuring they remain commercially viable.

On July 9, crypto mining firm TeraWulf announced it paid off its $77.5 million debt ahead of schedule. This strategic move enables the company to concentrate on expanding its mining infrastructure without the burden of debt obligations.

TeraWulf’s Chief Strategy Officer, Kerri Langlais, emphasized their commitment to maximizing shareholder value through organic growth and operational efficiency rather than mergers and acquisitions. TeraWulf’s debt repayment comes at a critical time as the mining industry faces challenges post-Bitcoin halving. High energy costs and reduced block subsidies threaten less competitive mining firms.

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