News On Bitcoin - Week 37 2024

Weekly update on all things Bitcoin

September 17, 2024

TL;DR

  • BTC is up

  • Bitcoin dominance is down

  • MicroStrategy Expands BTC Holdings to 244,800

  • US Election Won’t Derail Bitcoin’s Path to $100k

  • Bitcoin ETFs See Record $1.2B Outflows

  • Sky to Offboard WBTC Amid Justin Sun Concerns

  • Standard Chartered Launches Bitcoin Custody in UAE

  • UK Parliament Recognizes BTC & Crypto as Property

  • Solo Miner Scores $181K Block Reward

  • TEPCO Mines Bitcoin with Excess Renewables

  • Bitfarms Fast-Tracks 2.2 EH/s Mining Agreement

Bitcoin Price

Crypto is up this week, with BTC being up 3.6% and ETH down 0.2%:

Bitcoin dominance has decreased over the week, rising from 54.0% to a peak of 54.25% and ending at 54.0%. 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 surged from $57,335 to $58,560 on September 12, currently trading at $58,069, a 3.6% increase.

This rise followed US economic data, including an August Producer Price Index (PPI) increase of 0.3% month-on-month and 2.4% year-on-year, surpassing expectations.

Higher-than-expected unemployment claims at 230,750 also influenced market sentiment.

Consequently, the probability of a 50 basis points (bps) rate cut at the September 18 FOMC meeting fell below 15%, while the chance of a 0.25% cut rose to 87%, according to CME Group's FedWatch tool.

Bitcoin (BTCUSD) Analysis:

As of September 12, 2024, Bitcoin (BTC) is trading at $58,271.00, having broken above the short-term resistance at $57,800, indicating a positive short-term outlook.

In the medium term, Bitcoin is within a horizontal channel between $52,436 and $68,604, showing slight optimism but with potential risks of breakdowns. Long-term trends remain positive, with a rising trend channel and key support at $31,000.

Overall, Bitcoin's technical analysis suggests a generally positive short-term and medium-term outlook, with caution advised for potential volatility.

Expected Trading Ranges: Bitcoin (BTC): Support: $52,437 Resistance: $68,604

Market Outlook

With Bitcoin trading around $58,069 and targeting resistance at $68,119, the outlook remains positive if it breaks above this level.

However, potential challenges include a possible death cross in technical indicators and changing market expectations for interest rates, which could impact future price movements.

BTC/ETH ratio has seen an increase:

Over the past five days, the BTC to ETH conversion rate has experienced a general increase. On September 9, 2024, the rate was 24.13 ETH per BTC. It rose to 24.15 ETH on September 10, and continued to increase, reaching 24.47 ETH on September 11 and 24.59 ETH on September 12. As of September 13, the rate stands at 24.65 ETH, marking a cumulative increase of 1.08% over this period.

"In the last Bitcoin halving cycle, the bull rally began in Q4. Whales won’t let Q4 be boring with a flat YoY performance."

Financial News

MicroStrategy has acquired 18,300 BTC for $1.1 billion, bringing its total holdings to 244,800 BTC, valued at $14 billion. The purchase, made at an average price of $60,408 per BTC, was funded by selling 8 million shares. The firm, led by Michael Saylor, has invested $9.45 billion in Bitcoin at an average cost of $38,585 per BTC.

Since 2020, MicroStrategy has become the largest corporate Bitcoin holder. Its investment has paid off, with the BTC yield reaching 4.4% in Q3 and 17% year-to-date. The company continues leveraging stock sales and BTC yield to expand its holdings.

Bitcoin enthusiasts are discussing how the upcoming US election might impact its price. Despite political tensions, experts like Steven Lubka from Swan Bitcoin and James Davies from Crypto Valley Exchange believe Bitcoin will reach six figures regardless of who wins. Trump's newfound support for Bitcoin contrasts with Harris's unclear stance, causing debate among investors.

Analysts argue Bitcoin's value is driven by global macroeconomic forces rather than US politics. Although the market showed short-term volatility following a recent debate, experts maintain that Bitcoin's long-term growth potential remains strong, predicting it will hit $100k by 2025.

U.S. Bitcoin ETFs experienced $1.2 billion in outflows over eight days by September 6, the longest streak since their launch. Major funds like Fidelity’s FBTC and Grayscale’s GBTC were heavily impacted. This trend reflects investor concerns and global economic uncertainty, including mixed U.S. job data and deflationary pressures in China. The outflows coincide with a broader retreat from riskier assets.

September has been tough for Bitcoin, with a 7% loss despite a brief recovery. Analysts attribute the outflows to economic challenges, geopolitical tensions, and cautious market sentiment. While some view this as a downturn indicator, others see a buying opportunity, expecting eventual strong recoveries. The market remains watchful for macroeconomic data and U.S. political developments.

Adoption News

Sky (formerly Maker) plans to offboard Wrapped Bitcoin (WBTC) due to concerns over Justin Sun’s alleged control. BA Labs proposed this move, citing Sun's potential hidden influence through BitGlobal, involved in WBTC's restructuring. To minimize user impact, Sky will gradually increase liquidation thresholds before the complete offboarding by October 8, 2024.

Sky has $73M in WBTC collateral supporting 127M DAI, contributing $15M annually. The firm is exploring alternatives like Coinbase’s cbBTC and Threshold’s tBTC to replace WBTC, aiming for more secure and diversified collateral options.

Standard Chartered has launched digital asset custody services in the UAE, offering secure storage solutions for Bitcoin and Ethereum. Approved by the Dubai Financial Services Authority (DFSA), this service is launched in partnership with Brevan Howard Digital. This move highlights the growing demand for regulated custody services and positions the UAE as a leader in digital asset adoption.

Bill Winters, Group CEO of Standard Chartered, emphasized that digital assets represent a significant shift in finance. The UAE’s favorable regulatory environment and innovation commitment have made it an attractive destination for digital asset businesses, underscoring Standard Chartered’s strategic expansion into this evolving market.

The UK Parliament has introduced the Property (Digital Assets etc) Bill, marking the first legal recognition of Bitcoin, cryptocurrencies, NFTs, and carbon credits as personal property. This legislation aims to close the legal gap by providing protection against fraud and theft for digital asset owners and clarifying complex property disputes.

Justice Minister Heidi Alexander highlighted the bill's importance in keeping the law aligned with evolving technologies and maintaining the UK’s leadership in the global crypto sector. The new framework will enhance legal protections and attract more business to the UK's legal services industry.

Mining News

A solo Bitcoin miner struck it rich by mining block 860749, earning a $181,000 reward on September 10, 2024. The miner secured 3.125 BTC plus transaction fees, despite the high difficulty and dominance of large mining pools like FoundryUSA, which control over 50% of the network’s hashrate.

This rare solo success, akin to winning the lottery, is made possible by new, high-power mining rigs that enhance individual miners' competitiveness. While solo mining remains challenging due to the network's record hashrate, this win demonstrates that smaller miners can occasionally achieve significant rewards.

Japan's largest power company, TEPCO, through its subsidiary Agile Energy X, has begun mining Bitcoin using excess renewable energy. By installing mining rigs next to solar farms in Gunma and Tochigi, TEPCO efficiently utilizes surplus green energy that would otherwise be wasted, reducing grid overload.

Agile Energy President Kenji Tateiwa noted that Bitcoin mining provides renewable energy producers with additional income, fostering further investment in clean energy. This initiative showcases Bitcoin mining's potential to incentivize renewable energy growth by converting excess power into profit.

Bitfarms has expedited its hosting agreement with Stronghold Digital Mining, deploying 10,000 Bitmain T21 miners at its Pennsylvania facility by October 1, 2024, two months ahead of schedule. This addition will boost Bitfarms' computing power by 2.2 EH/s, enhancing its energy trading, competitive power costs, and HPC/AI capabilities.

Bitfarms will share 50% of the profits with Stronghold, with the agreement renewing annually unless terminated by either party. Riot Platforms, Bitfarms' largest shareholder, has criticized the Stronghold acquisition, claiming it undermines shareholder value and entrenches Bitfarms' board.

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