Institutional money flowing into BTC
Bitcoin has had a massive week, smashing upwards of $11… $12… $13 and even touching $14K USD before a significant correction back to $10.5K USD overnight. It’s safe to say we are right in the midst of the next bull run. Some key drivers pushing this growth can be seen across the institutional markets with a general run up in gold as well as safe haven assets.
Institutional money looks to be flowing heavily into the bitcoin economy. Greyscale’s bitcoin trust traded the week with a bitcoin premium above 40%, bitcoin was hovering in the mid $10Ks and investors were purchasing shares in the trust at $14.60 making the value of a single bitcoin $14.6K.
As one of (if not the) largest purchaser of bitcoin, Greyscale reported purchasing 11,236 bitcoin in April. Given only 54,000 new bitcoin a month are presently mined, this makes Greyscale the sole purchaser of 21% of all new supply. Considering these numbers don’t include Fidelity or Bakkt, just imagine the shortage in supply come May 2020 if this appetite remains and the supply is halved.
Adding to this, recent studies and back of the envelope math point towards 20-25% in lost circulating supply. If these numbers are true, we are looking at an even scarcer asset. Watch this space.
Links of interest: Greyscale bitcoin trust price
Bitcoin hash rate hits all time high
The bitcoin hash rate hit an all-time high of 65.1M TH/s trillions of hashes per second (TH/s) this week, beating its previous high of 61.9M TH/s in August 2018. Historically, increased hash rate has led to price appreciation, take 27th August 2018 when we hit that previous high, the price per bitcoin was just under $7,000, and we all know where that ended… bitcoin hitting all time highs of $20k!
Mining hardware has improved immensely in the last 12 months. This September, Bitmain is releasing its newest SHA miner, the S17 Pro which is set to produce 56 TH/s. Unlucky for Bitmain, there are now many more competitors in-market such as Ebang, Inno, Canaan and more. MiningStore have access to a 70 Th/s miner for $2650 per unit, a far better deal than what Bitmain is offering. For those interested in getting into Bitcoin mining, please get in contact ASAP as there is a global shortage of miners now.
With business striving to compete for the best and most economical miner, it’s a great time for crypto enthusiasts to seek out value deals on wicked mining gear.
Employers pay in BTC
Earlier this week, renowned gold bug and bitcoin critic Peter Shchiff brought the idea of paying staff in bitcoin into the spotlight. Schiff came out swinging in full force and in response, the crypto community has donned the gloves and we have heard countless success stories to rebuke Schiff.
For example, trading platform Kraken revealed it pays over 250 of its employees in bitcoin and has been doing so for years. In fact, one savvy bitcoin OG’er working for Kraken in 2012 elected to have 100% of their salary paid in bitcoin… well who’s laughing now? Just one year later, said employee handed in their lanyard and retired completely from the gains.
One Aussie start-up has even made it possible for anyone to get paid in bitcoin….
Anyone else up for a 2020 retirement?
New coin on the block – Algorand
Meet Algorand (ALGO), who kicked off trading last Friday with an initial listing price of $3.28USD. Algorand listed on major exchanges, Binance and Hotbit amongst others, and initial daily volume is upwards of $150M USD, even touching $300M USD+ on several occasions. At time of writing Algorand has cooled off a bit and is trading around $1.40 USD.
Turns out this wasn’t just any old launch, as the amount of interest in this project during pre-sale was incredible. With many investors unable to get a full, if any, allocation. But those that did managed to get seed allocations as low as $0.10USD. The project managed to raise $60M USD through a Dutch auction just days before it went live on exchanges… and this is on top of the $66M USD secured through venture capital firms Union Square Ventures and Pillar Venture Capital. Algorand’s total supply will eventually be ten billion Algos and they plan to hold an auction every year selling off 600 million Algos each time.
Algorand offers a proof of stake consensus with initial returns looking to be 15% p.a. The project hangs its hat on being the first blockchain to provide immediate and secure transaction finality with no uncertainty and no forking. Ever. Blocks will be finalised in seconds and they’re predicting to be on par with large payment and financial networks. The project also has a trademarked term, “VAULT”, which as they put it “…is a blockchain compression technology that minimizes storage and facilitates joining the Algorand network”. This allows the chain and project to grow in size without the burden of large transaction history and users.
Links of interest:
New York City based LedgerX LLC gains approval for physically settled BTC derivatives:
Some of the biggest news to hit this week has been LedgerX LLC being granted CFTC approval to offer physically settled bitcoin futures (meaning LedgerX will need to own the underlying bitcoin asset). The onboarding process according to LedgerX CEO Paul Chou will commence in July for U.S. and Singapore consumers and the initial minimum account balance will either be $10K USD (or equivalent in bitcoin,). They are hoping to reduce this to zero within the first year.
Paul Chou wrote the below in his recent blog post:
“With our new license granted today, both retail and institutional customers can interact in the same transparent marketplace, LedgerX Omni, the first and only regulated US institution to offer these capabilities to the retail audience…”
“In fact, we are the only company to have received both a Swap Execution Facility (“SEF”) and a Derivatives Clearing Organization (“DCO”) registration to enable regulated trading of bitcoin derivatives. By operating both the exchange and clearing house, we can uniquely offer clients a vertically integrated trading and custody solution.”
“You will be able to sign up in 90 seconds with just a drivers licence.”
It took LedgerX more than five years to get to this point in time and they believe they are at least six months ahead of the competition. What LedgerX has achieved is no small feat and the fact they operate out of New York City, arguably the most regulated state in the U.S. is incredible for the space.
Technical snapshot brought to you by Will Wright at MiningStore
BTC has continued to gobble up many of the smaller cap alt coins in the market, however, there is strong belief that some of that value will begin to flood into ETH and then into higher cap alt coins.
ETH has had a major pull back down to a major support line at $300 USD. This support line is formed by the bottom of the ascending channel, a major previous support line of ETH and also the 23.6% Fib line. For those looking to go long ETH, now presents a nice entry point. First target will be at the 38.2% fib line ($313 USD). Long term target is at the previous major resistance line of $390 USD. Keep an eye on the purple 500 day moving average line currently at $323 USD, should ETH break this line again we could see ETH shoot towards $400 USD
Key achievements this week for the alts we follow here at Miningstore:
- Joining the Binance DEX ecosystem by offering a B-Loki token tradeable on Binance DEX, trusted bridges will be provided for the community to trade mainnet Loki to B-Loki enabling trading and staking to still take place easily and efficiently. The announcement saw a huge jump in liquidity and price for the project. Read all about it here
- Released a new GUI electron wallet
- Proposed change to hashing algorithm away from merged mining and heading towards a RandomXL algo (based around RandomX) it will provide opportunities for CPU miners.
- Getting onboarded to the Chameleon Pay platform
- Flare wallet – Beta version coming soon – will allow users to swap any coins within the wallet using decentralized methods while using the NIX protocol to break the linkage between swaps – all built on the TOR privacy of the NIX network. Read all about it here
- Turned 1 year old as a project! Read all about it here
Author: Julian Carruthers
Not financial or investment advice, always do your own research.