News On Bitcoin - Week 30 2024

Weekly update on all things Bitcoin

July 30, 2024

TL;DR

  • BTC is down

  • Bitcoin dominance is up

  • China Rate Cuts Cause Market Instability

  • Mt. Gox Moves $2.8 Billion in Bitcoin for Repayments

  • MARA Expands Bitcoin Holdings to 20,000 BTC

  • Ferrari Expands Bitcoin & Crypto Payments to Europe

  • Proton Mail Launches Bitcoin Wallet

  • OKX Launches Bitcoin Price Game on Telegram

  • Swan to Ends Mining Operations, Cancels IPO

  • Riot Acquires Block Mining for $93M

  • Tiny Home Miner Earns $200K in Bitcoin

Bitcoin Price

Crypto is down this week, with BTC being down 1.1% and ETH down 8.4%:

Bitcoin dominance has increased over the week, rising from 51.7% to a peak of 52.65% and ending at 52.6%. Bitcoin is up due to strong bullish momentum, significant short position liquidations, successful breakouts above key levels, positive market sentiment, and ongoing institutional interest.

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 dropped over 3.5% today due to a risk-off sentiment following a sell-off in U.S. equities, significant Ethereum ETF outflows, and $330 million in liquidations from leveraged long positions.

Bitcoin (BTCUSD) Analysis:

Bitcoin (BTCUSD) has faced a 6% correction over the past three days, driven by robust U.S. macroeconomic data, concerns over an artificial intelligence investment bubble, and ongoing legal issues with Bitfinex and Tether. The U.S. economy's 2.8% annualized growth rate and declining jobless claims have reduced Bitcoin's appeal as an inflation hedge. Concurrently, a selloff in AI-related tech stocks has spread risk-off sentiment across markets, negatively impacting Bitcoin.

Expected Trading Ranges: between $63,000 to $68,000

Market Outlook

The cryptocurrency market is currently facing downward pressure due to a risk-off sentiment triggered by a sell-off in U.S. equities, significant ETF outflows, and substantial leveraged long liquidations. The market is expected to remain volatile in the short term, with Bitcoin trading within established ranges of $63,000 to $68,000. Medium-term prospects depend on macroeconomic factors and Federal Reserve policies, while the long-term outlook remains positive driven by institutional interest and technological advancements.

BTC/ETH ratio has seen a increase:

Over the last six days, the BTC to ETH rate has increased. Starting from 19.07 ETH per BTC on July 20, the rate climbed to 20.74 ETH per BTC by July 25, reflecting a rise of approximately 8.7%. This upward trend indicates that Bitcoin has gained strength against Ethereum during this period, with the rate increasing consistently, except for a slight dip on July 23.

Financial News

Bitcoin and broader equities tumbled on Thursday as China's surprise rate cut intensified market instability. The People's Bank of China (PBoC) slashed its one-year medium-term lending facility rate to 2.3%, injecting 200 billion yuan to support a weakening economy. This unexpected move, alongside earlier rate cuts, exacerbated concerns over China's economic health, leading Bitcoin to drop nearly 2% and ether to fall over 5%.

European equity markets also declined, with Germany's DAX and France's CAC both losing more than 1.5%. The steepening of the U.S. Treasury yield curve added to market anxieties. The spread between 10-year and two-year Treasury yields increased, reflecting rising long-term yields and persistent short-term inflation fears. This shift has historically signaled risk aversion, as investors adjust their expectations for Federal Reserve policy and inflationary pressures.

Mt. Gox, once the largest Bitcoin exchange, has begun substantial bitcoin transfers to repay creditors after its 2014 collapse. Recent transactions moved over $2.8 billion worth of bitcoin to new addresses, part of a $9 billion repayment plan for 127,000 creditors. The transfers have impacted the market, causing bitcoin's price to dip below $66,000.

Despite market fluctuations, large investors are buying the dip, indicating long-term holding strategies. The ongoing repayments represent a significant step in resolving the decade-long Mt. Gox saga, with major exchanges like Bitstamp and Kraken preparing to distribute the recovered funds to creditors.

Bitcoin miner MARA has invested an additional $100 million in Bitcoin, raising its total holdings to over 20,000 BTC, nearly 0.1% of Bitcoin’s total supply. This acquisition reflects MARA's strategy to adopt a full "HODL" approach, retaining all mined Bitcoin and making periodic purchases to capitalize on favorable market conditions.

The recent purchases, estimated to be around 1,500 BTC, were made at prices between $54,000 and $68,000. MARA's CFO Salman Khan highlighted that the company strategically benefited from current market conditions, while the CEO, Fred Thiel, emphasized Bitcoin's value as a reserve asset. MARA, formerly known as Marathon Digital, plans to continue this strategy, leveraging its balance sheet and capital markets for future operations.

Adoption News

Ferrari will soon accept Bitcoin and other cryptocurrencies at its European dealerships, starting this month. This expansion follows the introduction of crypto payments at its U.S. dealers last year. The rollout, which Ferrari plans to complete by the end of July, will be facilitated through its partnership with BitPay, which converts Bitcoin into fiat currency to mitigate volatility.

The move is aimed at offering more flexibility and convenience to customers and aligns with the growing trend of mainstream adoption of cryptocurrencies. This initiative reflects Ferrari's strategy to cater to its tech-savvy, high-net-worth clientele and reinforces the legitimacy of cryptocurrencies as a viable payment method.

Proton has introduced early access to its new Proton Wallet, a self-custodial Bitcoin wallet featuring end-to-end encryption. This open-source wallet is designed for enhanced security, incorporating advanced features like 2FA and Proton Sentinel to protect users from cyber threats.

It supports Bitcoin transactions in over 150 countries and integrates seamlessly with Proton Mail, allowing users to send Bitcoin directly to other Proton accounts. Currently available only to Proton Visionary and Lifetime users, the wallet is set to expand its public access soon, enhancing Proton's suite of privacy-focused tools. This launch marks a significant addition to Proton's offerings, aligning with its mission to provide secure, privacy-oriented solutions.

OKX has introduced "OKX Racer," a Telegram mini-app that invites users to guess short-term Bitcoin price movements in five-second intervals. This move marks OKX as the first major centralized crypto exchange to develop a Telegram mini-app, joining the growing trend of interactive, blockchain-linked games on the platform. Players can predict whether Bitcoin’s price will rise or fall, earning points and rewards for accurate guesses. The game also offers referral incentives and in-game upgrades.

The launch of OKX Racer aligns with Telegram's expanding blockchain initiatives, including plans for a mini app store and web3 support. As Telegram evolves into a hub for crypto engagement, OKX’s game aims to capitalize on this trend, enhancing user interaction and participation within the crypto community.

Mining News

Bitcoin services firm Swan will cease its mining operations and cancel its IPO plans. CEO Cory Klippsten announced that the firm no longer expects significant near-term revenue from its “Managed Mining” group, leading to the discontinuation of its operations and IPO withdrawal.

As a result, Swan will reduce spending on its core financial services and cut staff across various functions. Despite Bitcoin’s resilient hash rate post-Halving, miner profitability has declined, risking network integrity if more miners liquidate BTC reserves and halt operations.

Riot Platforms has acquired Kentucky-based Block Mining for $92.5 million, including $18.5 million in cash and $74 million in stock. The deal, announced on July 24, boosts Riot's self-mining hashrate by one exahash per second and diversifies its energy exposure beyond Texas. Block Mining’s current capacity of 60 MW is set to expand to 110 MW by the end of 2024, with potential further growth to 300 MW.

This acquisition allows Riot to extend its operations nationally and tap into new energy markets in Kentucky. The deal follows Riot's increased hashrate in June and its ongoing efforts to acquire rival Bitfarms, overcoming significant legal challenges.

A small Bitcoin mining device with a hashrate of 500 gigahashes per second (Gh/s), called "Bitaxe," successfully mined a block worth approximately $206,000 on July 24. Produced by D-Central Technologies, this hand-sized device was connected to the Solo CKPool service, which allows solo mining without joining a traditional mining pool. The odds of such a small device mining a block were about 1 in 1.1 billion every 10 minutes.

Despite the low probability, the Bitaxe miner's success highlights the potential, albeit rare, profitability of solo mining. This event follows a similar solo mining success in April but with significantly more powerful equipment. The practice of solo mining, although compared to a lottery due to the high energy costs and low odds, is championed by some enthusiasts as a means to counteract the centralization seen in pooled mining operations.

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