News On Bitcoin - Week 34 2024

Weekly update on all things Bitcoin

August 27, 2024

TL;DR

  • BTC is up

  • Bitcoin dominance is down

  • Bitcoin ETFs See $39M Inflows, Ether ETFs Face Outflows

  • Bitcoin OTC Desk Balances at 2-Year High

  • Mt. Gox Transfers $700 Million in Bitcoin

  • Bitwise Acquires ETC Group for European Expansion

  • Democrats Leave Crypto Out of Party Platform

  • El Salvador Launches Bitcoin Certification

  • Gryphon Acquires Low-Cost Bitcoin Mining Facility

  • Vinanz’s Strategic Bitcoin Mining Approach

  • VanEck Advocates AI Integration for Bitcoin Miners

Bitcoin Price

Crypto is up this week, with BTC being up 5.2 % and ETH up 2.1%:

Bitcoin dominance has decreased over the week, rising from 53.6% to a peak of 54.31% and ending at 53.7%. Investor sentiment, regulatory changes, technological advancements, and the overall growth of the cryptocurrency sector shape Bitcoin's market dominance. Its reputation as "digital gold" also enhances its position, making it a key player in the market.

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’s recent rally above $60,000 is supported by resilient US job and inflation data, alongside steady inflows into spot Bitcoin ETFs.

The cryptocurrency gained 4% between August 21 and 22, maintaining the $60,000 support level despite some momentum loss.

Analysts suggest that a breakout above the $62,000 resistance is crucial for confirming a bullish trend.

Bitcoin (BTCUSD) Analysis:

Bitcoin (BTC) recently closed at $60,527.00, showing a short-term decline within a falling trend channel.

Resistance is approaching at $61,400, with a potential negative reaction expected unless the price breaks above this level.

The medium-term outlook is slightly positive with recent gains, but volume patterns suggest possible weakness. Long-term trends remain neutral, with key support at $53,694 and resistance near $70,000.

Expected Trading Ranges: Bitcoin (BTC): Support: $53,000 Resistance: $70,000

Market Outlook

Bitcoin is currently experiencing a short-term decline within a falling trend channel, approaching resistance at $61,400. A break above this level could signal a positive shift, while failure to surpass it might lead to further declines.

Medium-term prospects are slightly positive following a breakout above $57,400, but volume trends indicate potential weakness.

Long-term, Bitcoin remains within a rising trend channel, with key support at $53,694 and resistance at $70,000. Overall, the market outlook suggests caution, with a neutral to slightly positive long-term trend.

BTC/ETH ratio has seen a increase:

Over the last five days, the BTC to ETH rate has seen a slight increase. It rose from 22.58 ETH on August 19, 2024, to 23.03 ETH on August 23, 2024, marking an overall gain of 2%. Despite fluctuations, including a drop on August 22, the trend has been upward during this period, indicating a modest increase in Bitcoin's value relative to Ethereum.

“There are 8 Billion people on the planet. One in twenty-five thousand people own one #Bitcoin." 

Financial News

U.S. spot Bitcoin ETFs marked their fifth day of positive net inflows, adding $39.42 million on Wednesday. Grayscale’s mini Bitcoin trust led with $14.2 million, while funds from Fidelity, Bitwise, and BlackRock also reported inflows. Total trading volume across 12 Bitcoin ETFs increased to $1.42 billion.

In contrast, Ether ETFs recorded $17.97 million in net outflows. Grayscale’s ETHE fund saw $31.14 million in negative flows, while Fidelity and Franklin Templeton’s funds reported modest inflows. Trading volume for Ether ETFs reached $201 million, with cumulative net outflows now at $458.08 million.

Bitcoin's OTC desk balances have reached a two-year high of 368,000 BTC, indicating a potential market decline. These desks are often used by institutional investors and miners to discreetly sell large quantities of Bitcoin. The significant rise in OTC balances, driven partly by miners offloading due to economic pressure, mirrors patterns seen in late 2021 that led to a market correction.

Despite recent gains, on-chain data shows cautious sentiment, with the long-to-short ratio below one and key resistance levels approaching, suggesting potential bearish momentum if Bitcoin fails to break above $62,066.

Mt. Gox, the infamous defunct exchange, has transferred over $700 million in Bitcoin to unknown wallets. On Wednesday, it moved 12,000 BTC worth $709 million and 1,265 BTC worth $75 million. This major transaction follows a period of inactivity and raises speculation about potential distributions to creditors.

Despite the substantial transfer, Mt. Gox still retains around 34,000 BTC valued at nearly $2 billion. The market has remained steady, with BTC prices above $59,000. The ongoing reimbursement process has been met with increased holding by victims, who seem to be treating Bitcoin as a long-term investment.

Adoption News

Crypto asset manager Bitwise has acquired London-based ETC Group, adding nine Europe-listed exchange-traded products (ETPs) to its offerings. The deal boosts Bitwise's assets under management (AUM) by $1 billion, raising its total to over $4.5 billion. ETC Group’s notable products include a physical Bitcoin ETP (BTCE) and a staked Ether ETP (ET32).

This acquisition strengthens Bitwise's global presence as it plans to expand ETC Group’s platform across Europe. Bitwise, known for its U.S.-listed Bitcoin and Ether ETFs, sees the move as part of its strategy to grow as a leading global crypto asset manager.

The Democrats’ party platform, released ahead of their national convention, omits any mention of Bitcoin or cryptocurrency, differing sharply from the Republican platform that supports crypto-friendly policies. The document was finalized in July before President Biden dropped out of the race.

Despite recent efforts by industry advocates, including a town hall hosted by Crypto4Harris, to push for clearer crypto policies, the omission highlights a lack of focus on digital assets within the Democratic agenda. This contrast with the Republican stance could influence voters in the upcoming election, especially those interested in cryptocurrency regulation and innovation.

El Salvador has launched a comprehensive Bitcoin certification program for 80,000 civil servants, signaling a strong commitment to integrating Bitcoin into national governance. The 160-hour course, managed by the National Bitcoin Office (ONBTC), aims to educate public sector employees on Bitcoin’s legal framework and strategic management.

This initiative is part of President Nayib Bukele’s broader strategy to embed Bitcoin into the country's financial system. In addition to this program, Bitcoin education will be introduced in public schools to promote widespread digital currency knowledge.

Mining News

Gryphon Digital Mining has acquired Bitcoin mining operations in Louisiana, capitalizing on ultra-low electricity costs of $0.01 per kWh. This $1.5 million deal provides 2.9 megawatts of capacity and 59 PH/s of mining equipment, expected to generate $1 million in annual revenue.

CEO Rob Chang highlighted that securing low-cost power is crucial in a competitive post-halving landscape, giving Gryphon an edge in operational efficiency. The acquisition also supports Gryphon’s sustainability goals by using flare gas as an energy source and repurposing waste from oil extraction.

Vinanz, a UK Bitcoin miner, adopts a unique decentralized, asset-light, and debt-free model with operations spread across North America. Led by Chairman David Lenigas, Vinanz focuses on minimizing risks through geographical diversification in states like Indiana, Nebraska, Iowa, and Canada’s Labrador.

By outsourcing data center management, Vinanz reduces overhead but remains cautious about hosting costs and power outages. The company’s commitment to debt-free operations ensures financial stability amidst Bitcoin’s volatility. With dual registration in the UK and US, Vinanz’s shares (VINZF, BTC) offer regulatory clarity, liquidity, and capital access, positioning them as a forward-thinking player in the digital asset industry.

A VanEck report suggests Bitcoin miners should allocate 20% of their energy to AI and high-performance computing (HPC) to offset rising costs and declining block rewards. This strategy could generate $13.9 billion in additional revenue by 2027 and double stock values by 2028.

The increasing synergy between Bitcoin mining’s energy needs and AI’s computational demands positions miners uniquely to capitalize on this shift. As miners face profitability challenges post-halving, companies like Core Scientific are leading by securing significant AI contracts.

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