News On Bitcoin - Week 35 2024

Weekly update on all things Bitcoin

September 03, 2024

TL;DR

  • BTC is down

  • Bitcoin dominance is up

  • BlackRock Leads Bitcoin ETF Inflows

  • Australian Bitcoin ETFs Growing Steadily

  • BlackRock's Bitcoin ETF Sees First Outflow Since May

  • Nasdaq Seeks SEC Approval for Bitcoin Index Options

  • Stacks Activates Nakamoto Upgrade

  • Hilbert and Xapo Bank Launch Bitcoin Hedge Fund

  • TeraWulf Launches New Bitcoin Mining Facility

  • Bitfarms Expands U.S. Operations with 120 MW

  • GDA Expands Texas Bitcoin Mining to 400 MW

Bitcoin Price

Crypto is down this week, with BTC being down 2.3% and ETH down 5.6%:

Bitcoin dominance has increased over the week, rising from 53.6% to a peak of 54.4% and ending at 54.1%. 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 is making a strong attempt to reclaim the $60,000 level, with recent price gains of 3%, bringing BTC close to $61,000.

This upward movement comes as U.S. macroeconomic data, including jobless claims and GDP figures, remain mostly within expectations, reducing the likelihood of major financial policy shifts by the Federal Reserve.

Market participants are currently betting on a 0.25% interest rate cut by the Fed in September.

Bitcoin (BTCUSD) Analysis:

As of August 30, 2024, Bitcoin's market shows short-term bearish trends with support at $57,800 and resistance at $61,400, marked by a technical score of -72.

In the medium term, Bitcoin trades within a range of $52,922 to $68,826, with a neutral outlook and support at $57,400.

Long-term prospects remain cautiously optimistic, with support at $53,429 and resistance at $68,509, yielding a weak positive score of 29.

Overall, Bitcoin faces short-term volatility but holds potential for long-term growth.

Expected Trading Ranges: Bitcoin (BTC): Support: $53,429 Resistance: $68,509

Market Outlook

long-term growth for Bitcoin is expected. Despite current short-term volatility and medium-term uncertainty, historical data indicates that Bitcoin is developing within a rising trend channel.

This suggests that if it can break through key resistance levels, there is significant potential for continued growth and upward momentum over the long term.

BTC/ETH ratio has seen a decrease:

In the last five days, the BTC to ETH rate has experienced a decrease. On August 25, 2024, 1 BTC was worth 23.44 ETH, and by August 29, 2024, it had dropped to 23.49 ETH. This represents a net decline of 0.15 ETH over the period, indicating a slight overall decrease. The rate fluctuated, with notable drops on August 28 and August 26, despite some minor increases on other days.

“Bitcoin is the chain that, paradoxically, is unshackling humanity." 

Financial News

Bitcoin ETFs in the U.S. have experienced significant inflows, with BlackRock’s IBIT leading the charge. On August 26, IBIT recorded a $224 million net inflow, its largest in over a month, contributing to an $18 billion total in assets under management across U.S. Bitcoin ETFs. Despite these inflows, Bitcoin's price remains under pressure, recently dropping below $60,000 after a brief rally.

This divergence between inflows and price performance raises questions about market sentiment. While BlackRock's dominance in the Bitcoin ETF space is evident, mixed results among other ETFs highlight investor uncertainty amid volatile market conditions.

Australia's two spot Bitcoin ETFs—VanEck Bitcoin ETF and Monochrome's IBTC—are steadily accumulating Bitcoin holdings, indicating rising demand in the region. Since their launches earlier this year, VanEck has reached $40.72 million in assets under management, while IBTC holds around 123 BTC worth $7.4 million. Both funds continue to see inflows despite global market challenges.

In contrast, U.S. Bitcoin ETFs have faced outflows as Bitcoin struggles to break the $60,000 mark. The steady growth of Australia's ETFs highlights increasing interest in regulated Bitcoin investment, potentially boosting mainstream acceptance in the region.

BlackRock's iShares Bitcoin Trust experienced a $13.5 million outflow on Thursday, marking its first withdrawal since May 1st and only the second since its launch in January. This outflow occurred as Bitcoin ETFs faced a third consecutive day of withdrawals, totaling $71.8 million, with competing funds like Grayscale, Fidelity, and Valkyrie also seeing outflows.

Despite this, BlackRock's ETF has amassed over $20 billion in net inflows and manages over 350,000 BTC, making it a leading institutional Bitcoin holder. The mixed flows reflect varied investor sentiment as Bitcoin struggles to stay above $60,000, with some speculating whether this marks a market bottom or the beginning of more outflows.

Adoption News

Nasdaq has requested SEC approval to launch Bitcoin index options, aiming to provide institutional investors and traders with new tools for hedging risks and amplifying buying power. These options would be based on the CME CF Bitcoin Real-Time Index, which tracks Bitcoin futures and options on CME Group’s platform. The SEC has not yet approved any options linked to spot Bitcoin ETFs, including Nasdaq's application for BlackRock’s iShares Bitcoin Trust ETF.

Meanwhile, BlackRock’s spot Bitcoin ETF saw a $224.1 million net inflow on August 26, contributing to a $202.6 million joint net inflow across all U.S. spot Bitcoin ETFs.

Bitcoin L2 Stacks has activated its long-awaited Nakamoto upgrade, aiming to enhance performance by reducing transaction wait times from minutes to seconds. The upgrade increases Stacks block production by 120 times and introduces sBTC, a decentralized BTC representation for easier transfers between Bitcoin and Stacks.

The Nakamoto Activation Sequence has begun, with final implementation expected after a two-week cycle. Despite the upgrade's potential, Stacks' token price dropped, reflecting broader market trends. The success of this upgrade is crucial for attracting new users and capital to the Stacks ecosystem.

Hilbert Group's Hilbert Capital has teamed up with Xapo Bank to create a Bitcoin-denominated hedge fund, set to launch in September 2024 with over $200 million in initial investments. The fund is designed to offer corporates, businesses, and professional investors institutional-grade credit structures to grow their Bitcoin holdings, with fees lower than Hilbert's standard hedge funds.

Xapo Bank's Joey Garcia highlighted the fund's focus on structured Bitcoin growth, while Hilbert Group CEO Niclas Sandström pointed to their strong partnership and the fund's expected growth. This initiative marks a significant move in expanding Bitcoin's role in institutional investments.

Mining News

TeraWulf, the world’s sixth-largest Bitcoin miner, is launching a new 2-megawatt, liquid-cooled mining facility named WULF Den in September, followed by a 20-megawatt facility by year-end. The company is in talks with major tech firms, including members of the "Magnificent Seven" (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla), to form strategic partnerships, potentially with data centers or AI companies.

With an average production cost of $40,000 per Bitcoin, TeraWulf claims to be the most profitable Bitcoin miner on a per-share basis. Unlike other miners, it sells Bitcoin daily to capitalize on its low production costs, contrasting with Marathon Digital’s “hodl” strategy.

Bitfarms Ltd. has acquired its first large-scale U.S. site in Sharon, Pennsylvania, boosting its power capacity from 20 MW to 140 MW. The new data center is strategically located in the PJM grid, the largest U.S. wholesale electricity market, providing Bitfarms access to competitively priced power.

The site will support up to 8 EH/s and is expected to have 30 MW online by the end of 2024, with plans to expand to 120 MW by 2025. This acquisition is part of Bitfarms' broader strategy to grow its U.S. presence and diversify into high-performance computing and AI.

Genesis Digital Assets (GDA) plans to expand its Texas data center from 60 MW to 400 MW, emphasizing its commitment to renewable energy. The Rowdy Data Center, located in Vernon and supported by the Oklaunion Substation, benefits from local wind power and repurposes a retired power station.

This expansion is part of GDA's strategy to strengthen the Bitcoin network while leveraging Texas' renewable energy and innovation-friendly environment. The project has already created 12 permanent jobs and 150 construction jobs.

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