News On Bitcoin - Week 41 2024

Weekly update on all things Bitcoin

October 15, 2024

TL;DR

  • BTC is up

  • Bitcoin dominance is down

  • Dan Tapiero: Bitcoin's Path to $100K Unaffected by Election

  • Mt. Gox Delays Repayment to 2025

  • Supreme Court Clears Silk Road Bitcoin Sale

  • South Korean SEC Advances Bitcoin ETF Discussions

  • Peter Todd Refutes Satoshi Claims Amidst HBO Controversy

  • Bahrain Launches First Bitcoin Fund in GCC

  • IREN Faces Investor Lawsuit Over Misleading Claims

  • Mixed Performance Among Bitcoin Miners in September

  • Ethiopia Expands Bitcoin Mining Power to 600 MW

Bitcoin Price

Crypto is up this week, with BTC being up 0.9% and ETH up 0.7%:

Bitcoin dominance has decreased over the week, starting from 54.5% to a peak of 54.7% and ending at 54.4%. 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 showed resilience following the release of the latest U.S. Producer Price Index (PPI) report, which revealed higher-than-expected inflationary pressures.

The PPI for September increased by 1.8%, surpassing the forecasted 1.6%, adding to concerns about rising inflation alongside the Consumer Price Index (CPI). Despite this, Bitcoin rebounded from a dip below $59,000, recovering by 4% and reaching as high as $61,500.

The Federal Reserve's recent 0.5% interest rate cut, criticized for being unnecessary by some market commentators, added complexity to the inflation outlook.

Traders remain divided on the Fed’s next move, with an 84% chance of a smaller 0.25% rate cut in November, according to CME Group’s FedWatch Tool.

Despite the inflation curveball, Bitcoin avoided further decline, holding the $60,600 support level, as analysts predict potential upward movements.

Some traders see the possibility of retesting the $62,000 and $65,000 resistance levels in the near term, while others warn that a breakdown below $60,200 could lead to another volatile dip before a potential recovery.

Overall, the market’s reaction indicates growing divergence between crypto assets and traditional stocks as inflation continues to weigh on the broader financial environment.

Bitcoin (BTCUSD) Analysis:

Bitcoin closed at $60,577 on October 11, 2024, showing a 17.09% drop from its yearly high. Short-term and medium-term analyses are negative, with key support at $53,769 and resistance at $66,845. Strong negative momentum and low RSI suggest further declines, though oversold conditions may trigger a rebound. Long-term trends remain neutral, with resistance at $70,000, indicating a hold recommendation for the long term.

Expected Trading Ranges: resistance level at $66,845 and support at $53,769.

Market Outlook

The market outlook for Bitcoin is cautious, with recent weakness below key support levels suggesting potential for further decline. Resistance at $66,845 may hinder upward movement, while oversold conditions could trigger a rebound. Long-term trends remain neutral, with critical resistance at $70,000. Investors should watch key levels for direction.

BTC/ETH ratio has seen an increase:

Over the past six days, the BTC to ETH conversion rate has experienced a net increase. Starting at 25.75 ETH on October 6, the rate dipped to a low of 25.32 ETH on October 10 before rising to 25.66 ETH on October 12. This represents an overall gain of 0.09 ETH during the period, indicating a positive trend despite some fluctuations in the rate.

"If you think Bitcoin is risky Try working 40 years without being able to save anything then retire with nothing at 70"

Financial News

Dan Tapiero, founder of 10T Holdings, maintains that the upcoming US presidential election will not impede Bitcoin’s rise to $100,000. Speaking at a panel, he argued that the election's outcome is irrelevant to the growing cryptocurrency adoption, stating, "Everything is going up now."

Both presidential candidates display differing approaches to crypto, with Republican nominee Donald Trump promoting pro-crypto policies, while Democrat Kamala Harris has recently highlighted blockchain's importance. Despite political landscapes, Tapiero emphasizes that the global shift toward blockchain and significant institutional investment in Bitcoin and Ethereum will continue to drive the market forward.

Mt. Gox has postponed the deadline for repaying creditors by one year, now set for October 31, 2025, as stated by the trustee managing the exchange's assets. This decision follows the distribution of nearly $9 billion in recovered assets that began in July. The delay aims to alleviate concerns regarding potential selling pressure, as crypto wallets linked to Mt. Gox still hold 44,900 Bitcoin (BTC), valued at approximately $2.8 billion.

Analysts from Coinbase noted that the postponement could ease near-term worries about supply overhangs, although volatility may return once the on-chain funds are moved.

The U.S. Supreme Court has allowed the government to proceed with the sale of 69,370 bitcoins seized from the Silk Road marketplace, valued at approximately $4.4 billion. This decision followed the refusal to hear an appeal in the case of Battle Born Investments, effectively upholding a previous ruling that mandates the liquidation of these assets.

As one of the largest government bitcoin sales anticipated, the auction's timing and execution by U.S. Marshals may influence market sentiment. Although the auction may occur off-market, the prospect of sell pressure could still impact the cryptocurrency landscape.

Adoption News

The Financial Services Commission (FSC) of South Korea is taking significant steps toward Bitcoin ETF approval by forming a virtual asset committee. This committee will focus on essential regulatory issues, including the potential approval of spot ETFs and allowing corporate accounts for crypto exchanges.

The initiative aims to address the Kimchi premium, where cryptocurrency prices are elevated in South Korea compared to global markets. By encouraging arbitrage opportunities, the committee seeks to enhance market balance. Furthermore, the FSC is committed to strengthening market oversight to combat manipulation and protect user assets within the evolving crypto landscape.

The HBO documentary Money Electric: The Bitcoin Mystery suggests Peter Todd, an early Bitcoin developer, is Satoshi Nakamoto, Bitcoin's creator. Todd swiftly denied these allegations on social media, criticizing the filmmakers for creating a “dangerous narrative.” He expressed concerns for his safety and labeled the film irresponsible journalism.

Despite Todd's history of joking about being Satoshi, skeptics argue the evidence presented is weak. Prominent figures in the Bitcoin community have expressed doubts, reinforcing that while Todd's name adds to the speculation, the true identity of Satoshi remains unresolved, keeping the mystery alive.

The National Bank of Bahrain (NBB) has introduced the first Bitcoin-linked structured investment fund in the GCC, designed exclusively for accredited investors. This innovative fund provides exposure to Bitcoin while ensuring capital protection, allowing investors to benefit from Bitcoin's growth without the risk of losing their principal due to volatility.

Developed in partnership with ARP Digital, this product aims to attract cautious investors seeking to diversify their portfolios. Bahrain's proactive regulatory framework supports this initiative, reinforcing its position as a leading fintech hub and promoting the adoption of digital assets across the region.

Mining News

Investors have filed a class-action lawsuit against IREN, previously known as Iris Energy, alleging the crypto miner misrepresented its high-performance computing (HPC) abilities and business prospects. The lawsuit, led by Paul Williams-Israel and filed in a New York federal court on October 7, contends that IREN's Childress, Texas facility was inaccurately presented as HPC-ready, with its computing capacity grossly exaggerated.

The complaint cites a June 2023 statement announcing an expansion as materially misleading, claiming the facility is unsuitable for HPC. Additionally, it criticizes IREN's air cooling design, claiming inadequate testing under Texas conditions. The lawsuit seeks damages for investors misled by these statements.

September reports indicate varied performance among Bitcoin miners amid ongoing market volatility. Hut 8 and Iris Energy expanded operations but faced differing production outcomes. Hut 8 increased its hashrate from 18.5 EH/s to 19.5 EH/s yet saw a slight drop in Bitcoin production from 87 BTC in August to 85 BTC in September.

In contrast, Iris experienced significant growth, boosting production from 245 BTC to 347 BTC, aided by a 42% increase in mining capacity. Bitfarms, despite a decline in BTC mined due to rising network difficulty, achieved operational efficiency targets ahead of schedule, emphasizing the mixed landscape within the sector.

Ethiopia has significantly increased its electricity allocation for Bitcoin mining to 600 megawatts, establishing itself as one of the fastest-growing markets in the sector. Plans are in place to further enhance capacity by several hundred megawatts by year-end. Many local miners utilize mid-generation machines like the S19J Pro and A1346, prized for their low power consumption.

Earlier this year, Ethiopia signed power supply agreements with 21 primarily Chinese mining firms, aiming to leverage resources from the Grand Ethiopian Renaissance Dam. Despite generating 4.9 gigawatts of hydroelectric power, the country currently utilizes only about 5%.

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