News On Bitcoin - Week 38 2024

Weekly update on all things Bitcoin

September 24, 2024

TL;DR

  • BTC is up

  • Bitcoin dominance is down

  • Fed Cuts Interest Rates by 50 Basis Points

  • Trump Buys Burgers with Bitcoin in NYC

  • Scaramucci Reaffirms $100K Bitcoin Prediction for 2024

  • Louisiana Adopts Bitcoin for Utility Bills

  • Trump's Bitcoin Shift Due to NFT Sales

  • Commerzbank and DZ Bank Launch Crypto Trading

  • Bhutan's $780M Bitcoin Stash Tops El Salvador's

  • Norway Bitcoin Mine Closure Hikes Power Prices

  • Ancient Bitcoin Miner’s Wallets Awaken

Bitcoin Price

Crypto is up this week, with BTC being up 4.6% and ETH up 4.3%:

Bitcoin dominance has decreased over the week, rising from 54.34% to a peak of 55.26% and ending at 54.6%. 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 price has risen approximately 2.5% to over $64,120, influenced by dovish monetary policy from the Bank of Japan and the U.S. Federal Reserve.

The Bank of Japan's decision to maintain steady interest rates mitigates risks associated with borrowing costs, allowing investors to confidently leverage cheap yen to invest in higher-yielding assets like Bitcoin.

Concurrently, the Federal Reserve's 50 basis points rate cut enhances the appeal of speculative investments, as safer assets become less attractive, fostering a bullish sentiment among traders.

Additionally, Bitcoin's futures market has seen a significant increase in open interest, now at $34.39 billion—the highest since late August—indicating strong capital inflow and expectations for further price movements.

Bitcoin (BTCUSD) Analysis:

Bitcoin's price is currently at $63,855.00, showing a 2.84% increase. In the short term, it faces resistance at $64,000, with a weak negative outlook if this level isn't breached. Medium-term analysis indicates uncertainty within a range between support at $53,448 and resistance at $67,942, though the rising RSI suggests potential upward movement.

Long-term, Bitcoin remains in a rising trend channel, reflecting strong buy interest and a weak positive outlook, with support at $53,000 and resistance at $71,000. Overall, cautious optimism prevails, hinging on key resistance levels..

Expected Trading Ranges: Bitcoin (BTCUSD): $53448 (support) - $71000 (resistance)

Market Outlook

The market outlook for Bitcoin is cautiously optimistic, fueled by dovish central bank policies and rising investor confidence. With the price hovering around $64,120, increased open interest in futures at $34.39 billion and positive funding rates suggest strong bullish sentiment.

Bitcoin is nearing a critical resistance level at $65,500, and a breakout could target $78,400, indicating potential for further price appreciation while remaining mindful of possible corrections.

BTC/ETH ratio has seen a decrease:

In the last six days, the BTC to ETH conversion rate has generally experienced a decrease, dropping from 25.53 ETH on September 15 to 24.56 ETH on September 21, marking a decline of approximately 3.8%. This trend included fluctuations with a peak at 26.16 ETH on September 18 before the rate fell steadily, indicating a recent downward trajectory in the conversion rate despite a slight uptick of 0.04% in the last 24 hours.

"Owning Bitcoin now is a leveraged short on the purchasing power of fiat currencies ... which have a 100% track record of devaluing rapidly or collapsing entirely I should probably buy some."

Financial News

The Federal Reserve cut interest rates by 50 basis points, lowering the federal funds rate to 4.75%-5%, marking the first significant cut in over four years. This move addresses concerns about the U.S. economy, noting slowed job gains and a slight rise in unemployment despite good growth. The Fed aims to balance maximum employment and price stability, continuing to reduce Treasury and mortgage-backed assets.

Lower rates may increase Bitcoin's appeal, as traditional assets become less attractive. Historically, rate cuts boost liquidity, potentially driving demand for Bitcoin. Fed Chair Jerome Powell will discuss the decision further at 2:30 PM EST.

On Sept. 18, former President and 2024 Republican nominee Donald Trump made headlines by purchasing hamburgers with Bitcoin at Pubkey, a Bitcoin-friendly bar in New York City. This marked the first time a former U.S. president used cryptocurrency in a transaction. The event, attended by Bitcoin advocate Anthony Pompliano, was also shared on Trump’s Truth Social account.

The visit came shortly after Trump announced a new token through the World Liberty Financial platform. Despite previously criticizing Bitcoin, Trump has included Bitcoin miners in his 2024 campaign. During the event, he handed out “crypto burgers” and emphasized his potential to win New York’s electoral votes.

Anthony Scaramucci, founder of SkyBridge Capital, remains bullish on Bitcoin, predicting it will reach $100,000 by the end of 2024. His optimism is fueled by anticipated Federal Reserve rate cuts and upcoming pro-Bitcoin legislation in the U.S. Despite recent price fluctuations, Bitcoin's hashrate has soared to an all-time high of 740 exahashes per second, reflecting strong mining interest.

Scaramucci believes bipartisan support for digital asset regulations will bolster Bitcoin's long-term prospects. However, market analysts caution that while rate cuts could spark a Bitcoin rally, they might also lead to profit-taking and subsequent market dips.

Adoption News

Louisiana now accepts Bitcoin and other cryptocurrencies for public services, including utility bills, making it the first U.S. state to do so. This move aims to attract tech-savvy residents by providing more payment flexibility and streamlining services. State officials believe this modernization will appeal to a younger demographic and demonstrate cryptocurrencies' practical uses beyond investment.

This decision may inspire other states and prompt federal discussions on crypto regulations. While it poses regulatory challenges, Louisiana's bold step sets a precedent that could influence the future of cryptocurrency payments across the country, showcasing a practical application for digital currencies.

During the World Liberty Financial launch, Trump credited his NFT projects' success for changing his view on Bitcoin. Initially a Bitcoin critic, Trump saw his NFTs, minted on Polygon and purchased with crypto, as eye-opening. He mentioned his son Barron, an avid crypto user, as influential in this shift.

While Trump's new pro-crypto stance has garnered support from the crypto community for his second presidential run, some remain skeptical about his true motivations. Despite these doubts, Trump's position contrasts with other candidates like Harris, who show little engagement with the crypto industry, making him a favored choice for crypto enthusiasts.

Germany's Commerzbank and DZ Bank, two of its largest banks, are set to offer Bitcoin and crypto trading services, reflecting growing institutional demand. Commerzbank partnered with Deutsche Boerse's Crypto Finance to provide trading access for corporate clients, while DZ Bank teamed up with Boerse Stuttgart to enable its 700 cooperative banks to offer crypto services. This move follows Zurich Cantonal Bank's recent entry into retail crypto services.

With over $1 trillion in combined assets, Commerzbank and DZ Bank's involvement significantly boosts Bitcoin's mainstream adoption in Europe. Their regulated services cater to professional investors, emphasizing portfolio diversification and risk management. This development marks a major step in Bitcoin's integration into European finance.

Mining News

Bhutan has emerged as a major Bitcoin holder, amassing $780 million worth of the cryptocurrency, surpassing El Salvador's holdings. This positions Bhutan as the fourth-largest government Bitcoin holder globally. Bhutan's journey began in 2019, leveraging its hydropower resources for sustainable mining.

Partnering with Bitdeer in 2023, Bhutan aims to expand its mining capacity from 100 to 600 megawatts by 2025. With a GDP of around $3 billion, Bhutan's Bitcoin holdings constitute a significant portion of its economy, highlighting the country's innovative approach to leveraging renewable energy for digital asset accumulation.

Residents of Hadsel, Norway, are facing a 20% increase in electricity bills following the shutdown of a major Bitcoin mining center that consumed 80 GWh annually. The closure, prompted by noise complaints, has significantly impacted the local economy. Noranett, the regional electricity provider, lost 20% of its income, leading to higher costs for residents.

The average household now pays an additional $2,500 to $3,000 per year for electricity. Local authorities are seeking new businesses to replace the lost revenue and stabilize energy prices, highlighting the complex relationship between Bitcoin mining and local economies.

Five early Bitcoin miner wallets, dormant for over 15 years, moved their BTC on September 20, 2024. These wallets received 50 BTC each as block rewards shortly after Bitcoin’s 2009 launch, now worth around $15.9 million at current prices.

Speculations abound regarding the identity of the wallet holders, with some suggesting they could belong to Bitcoin’s creator, Satoshi Nakamoto, or early adopter Hal Finney. The sudden activity highlights Bitcoin’s dramatic value increase and historical significance, evoking curiosity and excitement within the crypto community.

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