Značka: Bitcoin Price

What determines the Bitcoin price?

Various factors impacting Bitcoin’s price include the supply and demand of BTC, competition from other cryptocurrencies and news, cost of production and regulation. Supply and demand Those with a background in economics are aware of the law of supply and demand. However, if you are unfamiliar with this concept, let’s help you to understand. As per this law, supply and demand market forces work together to determine the market price and the quantity of a specific commodity. For instance, the demand for an economic good declines as the price increases, and sellers will produce more of it or vice-versa. An event called Bitcoin halving impacts the Bitcoin’s price like the situation in which the supply of BTC decrease whereas the demand for BTC increases. As a result of the high demand, the price of BTC will move upward.  Moreover, Bitcoin was created by Satoshi Nakamoto with a 21 million BTC hard cap. That said, miners will no longer receive new Bitcoin for confirming transactions once that cap has been reached. The four-year halving of block rewards might not affect the price of BTC at that point. The things that will determine Bitcoin’s value will instead be its real-life applications. Competition and news BTC faces competition from altcoins like Ethereum (ETH) and meme coins like Dogecoin (DOGE), making portfolio diversification appealing to investors. Any upgrades by the existing cryptocurrencies might drive BTC’s price down in contrast to a completely different scenario in which Bitcoin was the only existing digital currency. Due to media coverage, you may want to buy crypto assets with a positive outlook and ignore those with a shady future.  Cost of production Production costs for Bitcoin include infrastructural expenses, electricity charges for mining and the difficulty level of the mathematical algorithm (indirect cost). The various levels of difficulty in BTC’s algorithms can slow down or speed up the currency’s production pace, impacting Bitcoin’s supply, which, in turn, affects its price. Regulation Cryptocurrency regulations are constantly changing, from countries like El Salvador accepting it as a legal tender to China formally banning crypto transactions. The price of BTC could decrease if there is concern over a specific government’s decision against cryptocurrencies. Additionally, regulatory uncertainty will create fear among investors, dipping Bitcoin’s value even further.

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Bitcoin trader says expect more chop, downside, then sideways price action for BTC this summer

Discussion of the state of the crypto market has been a dominant headline over the past few weeks as non-crypto native media excoriate Bitcoin (BTC) and DeFi investors for investing in assets with no fundamental value. At the same time, crypto-savvy analysts and traders have been pouring over charts, looking for clues that signal when the market will bottom and reverse course.Novice investors are clearly nervous and a few have predicted the demise of the burgeoning asset class, but for those that have been around for multiple cycles, this new bear market is just another forest clearing fire that will eventually lead to a healthier ecosystem. The next steps for the crypto market was a topic discussed in depth with Cointelegraph contributor Crypto Jebb and independent market analyst Scott Melker. The pair chatted about their views on why the value proposition for Bitcoin remains strong and what the price action for the top cryptocurrency could look like moving forward. [embedded content]Here’s a look at some of the key points discussed by Crypto Jebb and Melker. Bitcoin is being used as it was originally intendedTraders are primarily focused on Bitcoin’s spot price and lamenting the fact that it is not performing as the inflation hedge that many promised it would be, but Melker pointed out that its performance largely depends on the country and economic state of where an individual lives. Bitcoin may be down significantly in terms of U.S. dollars, but when compared to countries like Venezuela that are experiencing hyperinflation, or Nigeria, which has a large unbanked population, BTC has offered people a way to preserve the value of their money and transact in an open financial system. One of the biggest functions highlighted by Melker is that Bitcoin is the first real asset that has given people around the world the ability to opt out of the current financial system if it’s not working for them. According to Crypto Jebb, Bitcoin is thermodynamically sound, meaning he defined as the asset holding on to the energy that is put into the system and that it doesn’t “leak” it out through things like inflation. What direction will the market take?Regarding the market’s future, Melker made sure to emphasize that while it may not seem like crypto adoption is moving fast to those who have been in the market for years, “the adoption of Bitcoin is faster than the internet. It’s a hockey stick curve that is absolutely going parabolic.” Both Crypto Jebb and Melker suggested that the paradigm shift toward investing in cryptocurrencies just needs more time because people who have been conditioned to invest in things like a 401k or Roth IRA and most investors are trained to fear risk.In response to possible critics who would cite Bitcoin’s volatility as a core reason to avoid cryptocurrencies, Melker highlighted the struggles that equities markets have had lately, citing the poor performance of stocks like Netflix, Facebook, PayPal and Cathie Woods’s ARK funds. Melker said, “Last month was the first time I believe I saw research from Messari that said there wasn’t a single place that you could have basically put money in an asset class and stored any sort of value. And if you stayed in cash, you lost 8% of your buying power doing that.”Related: Deutsche Bank analysts see Bitcoin recovering to $28K by DecemberExpect more downside over the short-termAccording to Melker, the current condition of the market is poor and in the short-term, it’s important to remember that “the trend is your friend” and that further downside is likely. That being said, Melker indicated that there are some developments coming up that could help the market out of its lull, including the Fed tightening cycle which has historically put pressure on asset prices for the first three quarters of the tightening cycle until the market adjusts to the new reality. Melker said, “My best guess is that we have a very choppy, boring low-volume, low liquidity summer. Maybe we put in new lows, or maybe we just chop around from $17.5K to $22K or $23K, something like that. And then we really start to see what the market is made of coming into the end of the year.” Don’t miss the full interview on our YouTube channel and don’t forget to subscribe!The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Self-custody is key during extreme market conditions: Here's what experts say

The ongoing crisis of cryptocurrency lending and the associated crypto market decline once again confirms the importance of self-custody or the “true ownership” of crypto by its holder, according to several industry experts.In June, the cryptocurrency market capitalization plummeted below the $1 trillion mark, with Bitcoin (BTC) nearing its worst monthly losses since 2011. It remains to be seen whether crypto lending would survive the current crypto winter. Still, several industry executives agree that investors can protect their assets forever by simply moving them to self-custodial or noncustodial wallets.It’s crucial to remember that crypto financial services providers like Celsius or Babel are centralized finance (CeFi) platforms, as opposed to decentralized finance (DeFi) applications, according to Yves Longchamp, head of research at the Swiss crypto bank Seba.“Based on this evidence, CeFi platforms need to be better regulated with a focus on risk management. It is difficult to regulate DeFi as you cannot put a smart contract in jail, or simply close a DeFi application,” Longchamp said in a statement to Cointelegraph on Wednesday.One way to regulate the overall crypto market is to regulate the crypto user in the first place by providing education and investor protection tools along with reliable products from an independent source, the executive said, adding:“In the spirit of blockchain, self-administration is key: crypto holders should own their coins in non-custodial wallets. If a user is to make smart decisions they need to be well-informed on the risks they are undertaking.”Longchamp also argued that algorithmic stablecoins like TerraUSD (UST) are “unstable” and “should be avoided.” CeFi should focus on transparent asset-backed stablecoins, he said.According to Brian Norton, chief operating officer at MyEtherWallet, crypto investors now have enough tools to realize that they do not have to rely exclusively on CeFi to make trades and mitigate risks.Norton noted that crypto winters provide time and opportunity for people to learn how self-custody is done, adding:“If you are relying exclusively on centralized platforms, even when the yields are great, you’re still giving up a good deal of control over your digital assets. […] Self-custody is what crypto was built for, and what we are seeing right now is not unusual.”Crypto self-custody is about letting consumers fully control their keys and the fate of their crypto, according to Adam Lowe, chief product and innovation officer at the Arculus crypto wallet.Related: Noncustodial Bitcoin wallets unbannable, says exec behind Trezor wallets“Self-sovereignty supports balance and self-regulation, and is beneficial to the entire digital asset ecosystem,” Lowe said in a statement to Cointelegraph.

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Deutsche Bank analysts see Bitcoin recovering to $28K by December

Analysts from Deutsche Bank forecast Bitcoin (BTC) rebounding to $28,000 by December 2022 as the cryptocurrency market continues to grapple with gloomy times.Bitcoin and the wider cryptocurrency markets have endured a tough six months, with the value of BTC, in particular, enduring its worst quarter in 10 years. Macroeconomic conditions around the world have played a role, with stagnating markets and fears of inflation driving conventional stock markets and their crypto-counterparts down to painful lows.A report from Deutsche Bank analysts Marion Laboure and Galina Pozdnyakova provides an interesting perspective on the medium-term outlook for BTC. Their insights suggest that cryptocurrency markets have mirrored movements of the Nasdaq 100 and S&P 500 since late 2021.The pair believe that the S&P will rebound to its January levels and that Bitcoin’s correlation to the index could result in a 30% increase in value from current levels midway through 2022. This would see BTC back up to the $28,000 mark.Related: Better days ahead with crypto deleveraging coming to an end — JPMorganThe prediction may quell some of the fear and uncertainty swirling in the space, but the recovery of cryptocurrency markets is not so clear cut. Laboure and Pozdnyakova highlighted the recent collapse of the Terra ecosystem and the Celsius debacle and their influence on markets as exacerbating factors:“Stabilizing token prices is hard because there are no common valuation models like those within the public equity system. In addition, the crypto market is highly fragmented. The crypto freefall could continue because of the system’s complexity.”A separate investor note from JPMorgan suggests that the crypto ecosystem may already be in recovery. While firms like hedge fund Three Arrows Capital became insolvent after failing to meet margin calls from investors amid the crypto market crash, other industry players have propped up the ecosystem:“The current deleveraging cycle may not be very protracted given the fact that crypto entities with the stronger balance sheets are currently stepping in to help contain contagion and that venture-capital funding, an important source of capital for the crypto ecosystem, continued at a healthy pace in May and June.”The note also highlighted the relatively healthy amount of venture capital investment into cryptocurrency firms over the past two months — to the tune of $5 billion. This represents a $3.4 billion increase from the same period in 2021.

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Not giving up: VanEck refiles with SEC for spot Bitcoin ETF

VanEck, one of the first firms in the world to ever file for a Bitcoin (BTC) exchange-traded fund (ETF), is not giving up on its plans to launch a spot Bitcoin ETF in the United States.The firm has refiled an application for a physically-backed Bitcoin ETF with the U.S. Securities and Exchange Commission (SEC).Filed on June 24, VanEck’s latest Bitcoin ETF application comes months after the SEC rejected its previous spot Bitcoin ETF request on Nov. 12, 2021. The securities regulator based its decision on the ETF on its alleged inability to meet standards to protect investors and the public interest as well as to “prevent fraudulent and manipulative acts and practices.”In the latest filing, VanEck provided a wide number of reasons for the SEC to approve a Bitcoin ETF this time.The ETF company argued that the lack of a U.S.-listed spot Bitcoin exchange-traded products (ETP) does not prevent U.S. funds from gaining exposure to Bitcoin. That is because many U.S. ETPs use Canadian BTC ETPs to gain exposure to spot BTC, VanEck argued, stating:“Approving this proposal — and others like it — would provide U.S. ETFs and mutual funds with a U.S.-listed and regulated products to provide such access rather than relying on either flawed products or products listed and primarily regulated in other countries.”As previously reported by Cointelegraph, Canada was one of the first countries in the world to debut a spot Bitcoin ETF with the launch of the Purpose Bitcoin ETF in February 2021.VanEck went on to say that approving a spot Bitcoin ETF would be a logical step for the SEC after the authority decided to allow Bitcoin futures-based ETFs. As previously reported, VanEck’s BTC futures ETF started trading on the Chicago Board Options Exchange on Nov. 16, 2021.“After issuing the Bitcoin futures approvals which conclude the CME Bitcoin futures market is a regulated market […] the only consistent outcome would be approving spot Bitcoin ETPs on the basis that the Bitcoin futures market is also a regulated market of significant size as it relates to the Bitcoin spot market,” the new filing reads.Related: Grayscale’s legal challenge to SEC sparks response from the communityAccording to Bloomberg ETF analyst Henry Jim, the deadline for VanEck’s latest spot Bitcoin ETF is March 3, 2023.Van Eck tries spot #Bitcoin ETF againCboe re-files 19b-4 for the VanEck Bitcoin Trust, a spot Bitcoin ETF, after it was disapproved last NovSEC has not “noticed” this filing yet.Final deadline: Mar 3, 2023MVIS® CryptoCompare Bitcoin Benchmark Ratehttps://t.co/mTJF14okCy https://t.co/5ckwIiOJFT pic.twitter.com/7xpPkBTuic— ETF Hearsay by Henry Jim (@ETFhearsay) June 30, 2022VanEck is known as one of the first U.S. firms to ever file for a Bitcoin futures ETF. The company originally filed for a physically-backed Bitcoin ETF in June 2018 but the SEC repeatedly postponed its decision over the proposal to eventually reject it three years later.

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Worst quarter in 11 years as Bitcoin price and activity plunges

Bitcoin (BTC) has seen its worst quarterly loss in 11 years with price and activity on the blockchain both plunging over the last three months. The second quarter ending June 30 saw Bitcoin’s price fall from around $45,000 at the start of the quarter to trade at $19,884 before midnight ET on June 30 according to CoinGecko, representing a 56.2% loss according to crypto analytics platform Coinglass. It’s the steepest price fall since the third quarter of 2011, when BTC fell from $15.40 to $5.03, a loss of over 67% and worse than the bear markets of 2014 and 2018, when Bitcoin’s price slumped 39.7% and 49.7% in their worst quarters respectively. The past quarter saw eight weekly red candles in a row for Bitcoin and the month of June saw a draw down of over 37%, the heaviest monthly losses since September 2011 which saw the price fall more thaner 38.5% in the month.There are also signs that investors are keeping their powder dry — or they’ve run out of funds — during the bear. Activity on the blockchain is taking a dive with Bitcoin’s spot volume — the total amount of coins transacting on the blockchain — dropped over 58.5% in just nine days according to a June 29 analysis from Arcane Research.But its not just crypto markets in turmoil. Thanks to sky high inflation and rising interest rates the traditional stock market has also taken a pounding, with some calling it the “worst quarter ever” for stocks.Charlie Bilello, CEO of Financial advisory firm Compound Capital Advisors shared a chart on Twitter showing the S&P 500 index was down 20.6% in the first half of 2022, the worst start to the year for the index since 1962, when price return was -26.5%. The S&P was down 20.6% in the first half of 2022, the worst start to a year for the index since 1962. $SPX pic.twitter.com/OMcX7yfP5o— Charlie Bilello (@charliebilello) June 30, 2022The difficult economic conditions have seen a swath of staff layoffs from crypto companies including Gemini, Crypto.com and BlockFi. Most recently the crypto and stock trading platform Bitpanda cut its employee count by approximately 277 full-time and part-time employees.Related: 80,000 Bitcoin millionaires wiped out in the great crypto crash of 2022Crypto is closely tied to the wider tech sector and the tech heavy NASDAQ composite index has fell by almost 22.5% over the second quarter.A “Tech Layoff Tracker” from technology jobs board TrueUp reveals over 26,000 tech employees across 200 company wide cutbacks just in June alone.Tech Layoff Tracker. Source: TrueUpOver the quarter, 307 layoffs impacted over 52,000 staff with one of the largest coming from Elon Musk’s Tesla, with 3,500 impacted. Crypto exchange Coinbase features twice, firstly for its June 2 hiring freeze and job offer rescission of nearly 350 people and second for its June 14 staff layoff, affecting 1,100 individuals.

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80,000 Bitcoin millionaires wiped out in the great crypto crash of 2022

More than 80,000 Bitcoin (BTC) investors have had their millionaire status revoked due to the crypto market downturn, but lower prices mean the number of whole coiners is growing. Back on Nov. 12, just days after Bitcoin hit a new all-time high of around $69,000, a total of 108,886 BTC addresses reported a balance greater than $1 million, according to data from BitInfoCharts. Fast forward to the present day, with the price of Bitcoin struggling to hold above $20,000, a mere 26,284 addresses are reported to contain holdings valued at upward of $1 million, meaning that the number of paper millionaires has declined by more than 75% throughout the last nine months. The dramatic decline in the price of the flagship cryptocurrency has also impacted the number of whales — those who boast a Bitcoin wallet worth more than $10 million. While there were 10,587 addresses with a minimum cash value of $10 million in Nov. last year, just 4,342 hold the same status today, a decline of 58%. Despite the decline in the net worth of former BTC millionaires, the bear market has seen more than 13,000 new “wholecoiners” — a wallet that contains one or more BTC — added to the market, bringing the total number of wholecoiners to just over 860,000. This significant spike in the number of whole coiners would suggest that retail investors are accumulating large amounts of BTC while prices tank.Adding further credibility to the retail accumulation narrative, more than 250,000 addresses have added 0.1 BTC, or $2,000 at the time of writing, or more to their holdings over the past 20 days, according to data from Glassnode. Related: 71% of high net worth individuals have invested in digital assets: SurveyBitcoin and the rest of the digital asset market have been negatively impacted by a number of different issues, including increased regulatory scrutiny, sustained geopolitical unrest, rising inflation and interest rate hikes.Due to the increasing uncertainty around the stability of global markets, commentators seem to agree that the price of risk assets like Bitcoin could continue to suffer over a longer time frame. At the time of writing, Bitcoin is changing hands for $20,005, down 1.63% in the last 24 hours and 37% over the last 30 days, with a total market capitalization of $382 billion, according to data from CoinMarketCap.

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Bitcoin clings to $20K as analysts warn of a long, bumpy ride for the foreseeable future

Bullish cryptocurrency traders hoping that the market was on a path higher received a dose of reality on June 29 as the price of Bitcoin (BTC) dipped below $20,000 again during intraday trading. Data from Cointelegraph Markets Pro and TradingView shows that the top cryptocurrency fell under pressure in the early trading hours on June 29 with bears managing to drop BTC to a daily low of $19,857 before price was bid back above the $20,000 mark.BTC/USDT 1-day chart. Source: TradingViewHere’s a look at what several analysts are saying comes next for Bitcoin as it struggles to gain momentum and break free of the current price range. Prepare for a choppy summerA word of warning for traders looking to enter the market at these levels was offered by analyst and pseudonymous Twitter user IncomeSharks, who posted the following chart showing one possible path that BTC could take in the months ahead. BTC/USDT 1-day chart. Source: TwitterIncomeSharks said, “More people end up losing money in chop zones than the big drop zones. I’m bullish mid term for a lot of reasons. This summer is about swing trading and accumulation. I will derisk/sell majority end of November/December.”The possibility of a stronger pullback was also noted by Twitter user Altcoin Sherpa, who posted the following chart citing the importance of the $20,000 level.BTC/USD 4-hour chart. Source: TwitterAltcoin Sherpa said, “Around 20K will be a pretty important area on lower timeframes; lose that and we see a move to the range lows around 17K again IMO. If this area is the bottom, I expect to see 17-18K tested again to be honest.”Price could pullback to $16,400According to Rekt Capital, the recent price action mirrors other bear markets and could provide some clues on where the bottom will be.BTC/USD 1-week chart. Source: TwitterDuring the week of June 20, Bitcoin saw a similar buy-side volume as it experienced during the 2018 bear market bottom, near the 200-week moving average (MA). Rekt Capital said, “During the formation of the 2018 bottom however, that buyer volume preceded extra -20% downside. If $BTC were to drop an extra -20% soon, price would reach ~$16,400.”Related: Bitcoin holds $20K as ECB warns inflation may never return to pre-COVID lowsConsolidation leads to accumulationA more positive outlook was offered by Twitter user Miles J Creative, who posted the following chart supporting the thesis that a “bull phase is coming.”BTC price vs. 1yr+ HODL wave. Source: TwitterThe analyst said, “In Bitcoin’s history it has only had the current accumulation structure when exiting not entering bear markets. Perhaps this time is different but accumulation is saying a bull phase is coming.”The overall cryptocurrency market cap now stands at $897 billion and Bitcoin’s dominance rate is 42.7%.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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NYDIG study calculates the value of regulation worldwide in terms of BTC price gains

The need for regulation is a common theme in discussions about cryptocurrency, and the claim is often taken to be self-evident. Now, financial services company New York Digital Investment Group (NYDIG) has done some number crunching to prove the point. In a new study, NYDIG quantifies the effect of regulation on the price of Bitcoin (BTC) worldwide.NYDIG studied Bitcoin prices at regular intervals following regulatory events affecting digital asset taxation, accounting and payments, as well as decisions on the legality of service providers and the digital assets themselves. The research looked at the Americas, Europe, China and Asia except for China, and confined itself to the period between September 30, 2011, and March 31, 2022. The number of regulatory events considered in the study varied between 17 in the Americas and 10 in China. With the exception of China, Bitcoin price rises were seen in absolute terms at all intervals and in all regions after a regulatory event, with the prices jumping over 100% in all cases in 365 days.Data relative to “average Bitcoin return” showed similar trends, although less sharply. In the Americas, Bitcoin prices rose 160.4% in absolute terms 365 days after regulatory events, and 32.3% in relative terms. In Europe, those figures were 180.1% and 52.0%, respectively. In Asia except for China, the figures were 116.9% and -11.2%, however.China was the exception that proved the rule. The authors called regulation in China “existential,” noting that the Chinese government gradually imposed bans on mining and trading of digital assets. Therefore, the negative impact of regulation they found on Bitcoin prices in China was also evidence of the effect of regulation. Related: Deloitte and NYDIG set up alliance to help businesses adopt BitcoinThe authors conclude, “The results of the study are clear. Both on an absolute basis as well as [a] relative basis, increasing regulatory clarity is advantageous for the price of Bitcoin.” Then they moderate their language almost immediately, writing:“The implication is that regulatory clarity, while not always perfect, is appreciated by investors. It is worth noting that it is impossible to directly observe the effect of regulation as there are myriad factors impacting price at any given time.” Nonetheless, the authors express confidence that, due to the scope of their sampling, “the effects of this noise are somewhat cancelled out” in their findings.

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Bitcoin’s bottom might not be in, but miners say it ‘has always made gains over any 4-year period’

Your favorite trader is saying Bitcoin (BTC) bottomed. At the same time, the top on-chain indicators and analysts are citing the current price range as a “generational buy” opportunity. Meanwhile, various crypto and finance media recently reported that Bitcoin miners sending a mass of coins to exchanges are a sign that $17,600 was the capitulation move that pins the market bottom. There’s so much assurity from various anon and doxed analysts on Crypto Twitter, yet Bitcoin price is still in a clear downtrend, and the metrics don’t fully reflect that traders are buying every dip. A critical component of BTC price that many investors often overlook is the condition and sentiment of Bitcoin miners, which is exactly why Cointelegraph had a chat with Rich Ferolo of Blockware Solutions and Will Szamosszegi of Sazmining Inc. to gain clarity on what’s happening in the mining industry and how this might impact market sentiment going forward. Cointelegraph: Is the bottom in for Bitcoin? The price touched $17,600 nearly two weeks ago and it’s starting to feel like the fund-driven capitulation armageddon might be over. Thoughts? Will Szamosszegi: It’s impossible to say whether or not Bitcoin has hit a bottom. In general, I recommend a dollar-cost-averaging strategy to people: Just buy however much Bitcoin you feel comfortable with on a consistent schedule. We’ve seen drawdowns even bigger than this before — such as 93.7% in its early days and 83.4% in 2018. Bitcoin has always made gains over any four-year period in its history.CT: Currently, Bitcoin is trading below the realized price and below miners’ cost of production. The price also dipped below the previous all-time high and the hash rate is dropping. Typically on-chain analysts pinpoint these metrics hitting extreme lows as a generational purchasing opportunity, but is it? Rich Ferolo: Blockware has done a lot of research on this and we’ve calculated the breakeven price from machines as far back as the s9 from 2016, at $.07 per kilowatt, the breakeven is $38,000 for a s9. You’re going to see older machines coming off the network eventually. For the s17s, at $.07 cents per kilowatt, BTC needs to be at around $18,000. Newish machines are more efficient and while difficulty and the hash rate adjustment are trending down for current generation machines, anything above 90 terahashes (TH/s) can make it. Anything below 34 watts per Terahash is inefficient. One factor to consider is that the value of machines is going down. Even if BTC price starts to go up and there’s a symbiotic relationship between price and the macro factors impacting Bitcoin price and prices throughout the wider-crypto market.Machines are hard assets and the big aspect of mining is the machine. Bitmain and MicroBT adjust prices as BTC price goes up. This is a hard asset that, in a way, earns yield on a daily basis, the same way that BTC does. If you’re in the long game, you don’t care about the current price of BTC. Just because the BTC price goes down doesn’t mean all the miners will go down also. It’s more about survival of the fittest. You need to be aware of the macros, but it’s not as bad as one might think. There are different perspectives and situations depending on what size outfit you’re running. Big public companies have a lot of operational factors to consider, but their operational costs (OPEX) inflate their overall cost even if they get $.05 per kilowatt. Their model is different from the analytics of the average miner outside of the public user. CT: What is the state of the BTC mining industry right now? There are rumors that leveraged miners could go under, inefficient miners are turning off and equipment is being sold 50% to 65% lower than 2020 to 2021 prices. What’s happening behind the scenes and how do you see this impacting the industry for the next six months to a year? RF: I agree with all of your observations. We’re at a price consolidation point currently and the market is cleaning up the amount of mining debt that exists. If you can hang on and keep mining, it might keep the hash rate and difficulty at bay. Blockworks believes that there is a severe lack of infrastructure in the space. To have infrastructure, you have to have an incredible amount of CAPEX to get going. There’s been and still is a lack of infrastructure. Regardless of the machines that are there, there’s not a lot of space for hosting. From the broader standpoint, you’re going to see a lot of capitulation, insolvency and excess machines. I know a lot of the big players are putting a pause on funding for miners. That’s a plus for people wanting to get in the space, but we predicted a 60% hash rate increase in 2022 when things were booming. And, as the s19XPs come into light, the hashrate will go up. WS: Many veterans in this space have grown accustomed to these cycles in the Bitcoin ecosystem. Historically, you see the hashrate decline following the price doing the same. In drawdowns like this one, newer miners typically wash out, while the network fortifies. Over the next six months, mining will become more competitive, as bigger players may consolidate and buy miners at a discount.CT: Exactly why is now a good or bad time to start mining? Are there particular on-chain metrics or profitability metrics that miners are looking at or is it just a no-brainer that Bitcoin’s current pricing makes mining attractive? Let’s say I have $1 million cash, is it a good time to set up an operation and start mining? What about $300,000 to $100,000? At the $40,000 to $10,000 range, why might it not be a good time to set up at home or use a hosted mining service? RF: Regardless of the size of the investment, I don’t think any of those values frankly would warrant you wanting to set up infrastructure at scale. A million bucks worth of machines at $5,000 per machine will get you 200 machines, almost a 0.6 megawatts worth. 1 megawatt of power is equal to 300 machines. Housing 200 machines is way different than housing 2 to 10 machines. To diversify $1 million to $300,000, or 60 machines, that’s where you want to start looking at hosting, assuming you’re all in on mining. I treat mining as a hedge, so I’d take 60% of the capital and buy machines and 40% buy spot BTC, or 60% CAPEX for machines, 20% for OPEX and 20% for spot BTC. This is a broader place to think about hosting. $100,000 gets you 20 machines, so you could apply the same strategy. Most residential homes can’t handle that much power demand. There’s a threshold of at-home mining power capacity so you’d have to consider how much power you can get to your house without shutting down the neighborhood. The $10,000 to $40,000 range is more amenable to at-home mining. If your power rate is fixed at $.10 or below you could pull it, depending on where the price is. $40,000 will get you about eight machines. That’s more doable, to be honest. It’s about 24.4 kilowatts per hour for eight machines if you start from four to five machines and test the waters. It’s almost like dollar-cost-averaging into machines and buying them if prices continue to drop.Related: Buy Bitcoin or start mining? HashWorks CEO points to ‘attractive investment yield’ in BTC miningCT: Does BTC price dropping below its all-time high for the first time ever have any significant future ramifications on the fundamentals of the asset and industry? WS: The fundamentals of BTC are unchanged, which is why I still expect BTC to evolve into a global reserve asset. The industry, on the other hand, will learn from this crash: Do not be overleveraged and do not offer yields that leave you vulnerable.RF: Great question, I think from where we’re at now, it was expected based on where people (retail) had bought in the previous cycle. Smart money expected a long bear market to happen, but what has shocked everyone is when and how fast it happened. The mysterious long-awaited blow-off top never happened. Crypto has a lot more exposure and a lot more bad press due to recent implosions and we’ll see more because the news loves bad press and it’s easier to generate. For those who believe in BTC, they’ll ignore it and it’s the opportune time to buy and invest in the space, especially once all the bad energy is cleared out. Lots of people have probably sold the bottom and won’t be back, but this is just the basic market dynamics.CT: The network’s next reward halving is approaching in 676 days. In your view, how will this alter the landscape of industrialized mining and the amount of equipment required to solve an algorithm which becomes more difficult to compute with each halving? RF: Halving events tend to induce miner capitulation. I’m surprised that the current hash rate hasn’t fallen further. We’re not seeing the sharp decrease that was expected before like 20% to 25%. This happens because older-generation machines have to unplug and the rewards don’t match the cost but the expected hash rate increase that comes with each halving means older-gen machines benefit in the short term. Miners unplug when OPEX is unfavorable and then plug back in when the time is right. WS: Miners will want to reduce their costs, as half the reward in Bitcoin may render many mining operations unprofitable (assuming a constant Bitcoin price in United States dollars). Mining equipment will continue to improve in efficiency and miners will continue to seek out the most cost-effective energy sources. Halving is one of the many genius features of the Bitcoin network because it washes out inefficiencies.Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Final Capitulation — 5 reasons why Bitcoin could bottom at $10,000

Bear markets have historically been challenging to navigate for traders and the conventional set of “reliable” indicators that determine good entry points are unable to predict how long a crypto winter might last.Bitcoin’s (BTC) recent recovery back above the psychologically important price level of $20,000 was a sign to many traders that the bottom was in, but a deeper dive into the data suggests that the short-term relief rally might not be enough proof of a macro-level trend change.Evidence pointing to the need for caution was provided in a recent report by cryptocurrency research firm Delphi Digital, which suggested that “we need to see a little more pain before we have conviction that a market bottom is in.”Despite the pain that has already been felt since Bitcoin’s price topped in November, a comparison between its pullback since then and the 2017 market top points to the possibility of further decline in the short-term. BTC/USD price normalized since all-time high (Current vs. 2017 peak) source: Delphi DigitalDuring previous bear markets, the price of BTC fell by roughly 85% from its top to the eventual bottom. According to Delphi Digital, if history were to repeat itself in the current environment it would translate into “a low just above $10,000 and another 50% drawdown for current levels.” The outlook for Ether (ETH) is even direr as the previous bear market saw its price decline by 95% from peak to trough. Should that same scenario play out this time around, the price of Ether could drop as low as $300. ETH/USD price percent drawdown (current vs. prior ATH). Source: Delphi DigitalDelphi Digital said, “The risk of reliving a similar crash is higher than most people are probably discounting, especially if BTC fails to hold support in the $14K–16K range.”Oversold conditions prevailFor traders looking for where the bottom is in the current market, data shows that “previous major market bottoms coincided with extreme oversold conditions.”As shown in the weekly chart below, BTC’s 14-week RSI recently fell below 30 for the third time in its history, with the two previous occurrences coming near a market bottom. BTC/USD weekly price vs. 14-week RSI. Source: Delphi DigitalWhile some may take this as a sign that now is a good time to reenter the market, Delphi Digital offered a word of caution for those expecting a “V-shaped” recovery, noting that “In the prior two instances, BTC traded in a choppy sideways range for several months before finally staging a strong recovery.” A view of the 200-week simple moving average (SMA) also raises question on whether the historical support level will hold again.BTC/USD price vs. 200-week SMA and 14-week RSI. Source: Delphi DigitalBitcoin recently broke below its 200-week SMA for the first time since March 2020. Historically speaking, BTC price has only traded below this level for a few weeks during the previous bear markets, which points to the possibility that a bottom could soon be found. Related: Bitcoin price dips under $21K while exchanges see record outflow trendThe final capitualationWhat the market is really looking for right now is the final capitulation that has historically marked the end of a bear market and the start of the next cycle. While the sentiment in the market is now at its lowest point since the COVID-19 crash of March 2020, it hasn’t quite reached the depths of despair that were seen in 2018. According to Delphi Digital:“We may need to see a bit more pain before sentiment really bottoms out.”Crypto Fear & Greed Index. Source: AlternativeThe weakness in the crypto market has been apparent since the end of 2021, but the real driving force behind the market crumbling include run-away inflation and rising interest rates. BTC/USD vs. Fed funds rate vs. Fed balance sheet. Source: Delphi DigitalRising interest rates tend to be followed by market corrections, and given that the Federal Reserve intends to stay the course of hiking rates, Bitcoin and other risk-off assets are likely to correct further.One final metric that suggests that a final capitulation event needs to occur is the percentage of BTC supply in profit, which hit a low of 40% during previous bear markets. BTC/USD price vs. percentage of supply in profit. Source: Delphi DigitalThis metric is currently at 54.9%, according to data from Glassnode, which adds credence to the perspective that the market could still experience another leg down before the real bottom is in. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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It seems NFT-themed Bored & Hungry restaurant no longer accepts crypto

The Los Angeles Times reported Friday that recently opened NFT-themed burger joint Bored & Hungry no longer accepts cryptocurrency as a form of payment for its food.When questioned, one Bored & Hungry employee told the Los Angeles Times “Not today — I don’t know.” The individual didn’t give any indication of when the decision was made to cut crypto from the menu of payment options, nor did they know if crypto payments would be making a return.Bored & Hungry initially launched back in April of this year. At the time, one worker told the Los Angeles Times that the majority of its customers didn’t seem to care about crypto payment options, also noting that customers were generally indifferent to “the restaurant’s fidelity to the crypto cause.”Another Bored & Hungry restaurant patron told the Los Angeles Times “People want to hold onto their ethereum. They’re not gonna want to use it.” Customer Richard Rubalcaba said, “I don’t know how [crypto purchases] would work, with the crash.”Many of the restaurant’s patrons stated that they are not hardcore crypto enthusiasts, and simply frequent the establishment for the food. Customer Jessica Perez said, “We rate this up there with In-N-Out, maybe even better.”Changes to venue’s payment policies seem to fall in line with the overarching crypto and macro economical meltdown transpiring across the globe. But never fear, hungry crypto users! You can still visit Chipotle, which began accepting crypto payments earlier in June via Flexa. Several countries are facing relentless regulations and scrutiny and there are issues of contagion in the crypto market.Cointelegraph reached out to Bored and Hungry owner Andy Nguyen for clarification on the restaurant’s crypto acceptance, but did not receive a response prior to publication.

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