News On Bitcoin - Week 31 2024

Weekly update on all things Bitcoin

August 06, 2024

TL;DR

  • BTC is up

  • Bitcoin dominance is up

  • US Moves $2B Bitcoin After Trump’s Reserve Pledge

  • Morgan Stanley to Offer Bitcoin ETFs to Wealth Clients

  • Global Liquidity Surge: Bitcoin Bull Run Ahead?

  • Bitcoin 2024 Conference Highlights

  • University of Wyoming Launches Bitcoin Research Institute

  • Trump Launches Bitcoin Sneakers

  • Bitcoin Hashrate Hits Record High Amid Trump’s Support

  • CleanSpark Acquires Wyoming Bitcoin Mining Site

  • Riot Platforms Reports Wider Q2 Loss

Bitcoin Price

Crypto is down this week, with BTC being up 0.1% and ETH up 1.3%:

Bitcoin dominance has increased over the week, rising from 53.1% to a peak of 53.56% and ending at 53.2%. 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.

Bitcoin (BTCUSD) Analysis:

Bitcoin (BTCUSD) closed at $63,895 on August 1, 2024, down $2,164.77. The short-term outlook is negative, having broken through the floor of a rising trend channel. Support is at $57,000 and resistance at $71,000. Volume tops and bottoms poorly correlate with price movements, indicating weakened strength. The medium-term view suggests a weaker initial rising rate within a rectangle formation between $54,390 and $69,321. The long-term trend remains neutral with continued investor optimism.

Expected Trading Ranges: Support: $54,390 Resistance: $71,000

Market Outlook

The market is experiencing heightened volatility with cautious sentiment. Bitcoin is testing critical support at $57,000 and facing resistance at $71,000, indicating potential for further declines. This shows negative volume balances and decreased liquidity. Investors should monitor these key levels closely as current market conditions suggest potential instability and uncertainty.

BTC/ETH ratio has seen a increase:

Over the past six days, the BTC to ETH conversion rate has experienced a slight decrease. Starting at 20.71 ETH per BTC on July 26, the rate declined to 20.33 ETH per BTC on August 1. This represents a net decrease of 1.83% over the period. Despite minor fluctuations, the overall trend indicates a reduction in the BTC value relative to ETH.

Financial News

The U.S. government transferred $2 billion worth of Bitcoin, previously seized from the Silk Road, to unknown wallets just two days after former President Donald Trump’s pledge at the Bitcoin 2024 conference. Trump had vowed not to sell any U.S. Bitcoin holdings and proposed creating a strategic national Bitcoin reserve.

This move, which critics have labeled "tone deaf," follows Trump’s promises to make the U.S. a global crypto hub and Senator Cynthia Lummis’s proposal to buy 5% of Bitcoin’s total supply. The transfer has sparked mixed reactions within the crypto community, highlighting ongoing debates about Bitcoin’s role as a reserve asset.

Morgan Stanley will allow its financial advisors to offer Bitcoin ETFs to eligible clients starting Wednesday. Advisors can pitch BlackRock's iShares Bitcoin Trust and Fidelity's Wise Origin Bitcoin Fund to clients with a net worth of at least $1.5 million, a high-risk tolerance, and an interest in speculative investments. These ETFs will be limited to taxable brokerage accounts, and the bank will monitor clients' Bitcoin holdings to prevent excessive exposure.

Other major banks, such as Goldman Sachs and JPMorgan, restrict their advisors from pitching Bitcoin ETFs unless clients request them. This move signifies growing institutional adoption of Bitcoin in traditional finance, reflecting increased client demand and setting a precedent for other wealth management firms.

Global liquidity, the total money circulating in major economies, has hit a record $95 trillion, nearing the $100 trillion mark. This rise in liquidity often precedes Bitcoin bull runs, as seen when Bitcoin hit $73,000 in March and $69,000 in November 2021. Higher liquidity boosts spending on riskier assets like Bitcoin, as central banks lower interest rates and implement quantitative easing, creating favorable conditions for Bitcoin's price surge.

Bitcoin investors view the cryptocurrency as an alternative to the central banking system due to its fixed supply schedule. With global liquidity reaching new heights, Bitcoin's current price recovery to $64,500 signals potential for another significant bull run.

Adoption News

The Bitcoin 2024 Conference, held in Nashville, concluded on July 27th with significant announcements. BlackRock's Bitcoin Spot ETF has seen consistent positive inflows, and Robert F. Kennedy Jr. proposed a plan for the US Treasury to buy 550 Bitcoin daily, aiming to make Bitcoin transactions non-reportable and tax-free. Edward Snowden discussed Bitcoin’s role in combating corruption but warned of political exploitation, while Senator Lummis suggested the US government purchase and hold 5% of the total Bitcoin supply for 20 years.

Michael Saylor forecasted Bitcoin’s future value ranging from $3M to $49M per coin.The conference also featured bold statements from Trump, who pledged to acquire 1M Bitcoin for the US reserve, reject CBDCs, and address SEC issues. Despite ambitious commitments and projected valuations, Snowden’s caution highlights the complex political landscape surrounding Bitcoin.

The University of Wyoming will open the UW Bitcoin Research Institute (BRI) in August, aiming to enhance the quality of Bitcoin research. Directed by Bradley Rettler, an Associate Professor and Bitcoin activist, the institute will focus on producing high-quality, peer-reviewed studies on Bitcoin. Rettler has criticized current Bitcoin research for its inaccuracies, citing a 2018 study that overlooked critical aspects of Bitcoin’s technical adjustments.

The BRI, which accepts Bitcoin donations and invests a portion in BTC, will offer annual workshops, academic prizes, and weekly seminars. Wyoming continues to position itself as a Bitcoin hub, supported by pro-Bitcoin figures like Senator Cynthia Lummis and Caitlin Long. Recent legislation includes Lummis’s strategic Bitcoin Reserve bill and state laws that protect digital asset privacy.

Following his keynote at the Bitcoin 2024 conference, former U.S. President Donald Trump promoted limited edition Bitcoin-themed sneakers on social media. In a Truth Social post, Trump announced that the sneakers are available for purchase using Bitcoin or other cryptocurrencies.

This move comes after his speech in Nashville, where he vowed to fire SEC chair Gary Gensler and establish a strategic Bitcoin reserve if elected. Trump has previously embraced cryptocurrency through political donations and NFT collections, reflecting his ongoing engagement with digital assets.

Mining News

Bitcoin's 7-day average mining hashrate reached a new peak of over 667 exahashes per second on July 26th, coinciding with the Bitcoin 2024 conference. This surpasses the previous record of 657 EH/s set in May. The surge follows Donald Trump's announcement to support the Bitcoin mining industry, prompting major firms like Whatsminer and MicroBT to introduce advanced mining equipment.

Riot Platforms recently acquired Block Mining for $92.5 million, aiming to expand its hash rate and market presence. Increased miner revenues from Bitcoin's rising price have eased selling pressure, stabilizing network activity. This rising hashrate signals strong confidence in Bitcoin's future, with miners investing in innovative infrastructure to enhance transaction processing and network security.

CleanSpark Inc. has acquired its first Bitcoin mining site in Cheyenne, Wyoming, securing 75 megawatts (MW) of power contracts. The Las Vegas-based company plans to boost its mining capacity by over 2 exahashes per second (EH/s) through a 30 MW immersion-cooled data center, expected to be operational by the end of 2024.

The site will utilize Bitmain’s efficient S21 immersion XP machines, with future expansions adding 45 MW to contribute an additional 3 EH/s to CleanSpark's overall hashrate. This expansion into Wyoming follows the state's supportive stance on cryptocurrency, highlighted by the launch of the University of Wyoming’s Bitcoin Research Institute and the introduction of the BITCOIN Act by Senator Lummis.

Riot Platforms reported a significant Q2 net loss of $84.4 million, or $0.32 per share, missing estimates and doubling the forecasted loss. This marks the first quarterly loss since Q4 2022, primarily due to a 340% increase in the cost to mine Bitcoin, which soared from $5,734 to $25,327. Despite this, Bitcoin mining revenue rose 12% due to a near-100% increase in Bitcoin's price over the year.

However, overall revenue fell 8.75% year-on-year to $70 million, falling short of Zacks' estimates. The firm's Bitcoin production dropped 52% to 844 BTC, largely due to April's halving event. Riot nearly doubled its installed hash rate to 22 exahashes per second and aims to reach 36 EH/s by the end of 2024.

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